Pakistan’s Federal Minister for Energy Awais Leghari has ordered an immediate halt to electricity purchases that exceed the national least-cost benchmark, as authorities move to tighten oversight of the power sector and reduce consumer costs.
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The directive comes after a review revealed that several distribution companies (Discos) were purchasing electricity from Small Power Producers (SPPs) and Captive Power Plants (CPPs) at rates higher than permitted under regulatory guidelines. Officials warned that such off-merit procurement practices were contributing to increased electricity bills for consumers.
According to the Energy Ministry, the review found that some Discos were bypassing the Economic Merit Order system, which is designed to ensure that electricity is purchased from the lowest-cost available sources. This deviation was described as a key factor in inflating overall power costs.
The minister has now instructed all utilities to strictly follow rules set by the National Electric Power Regulatory Authority (NEPRA), including compliance with Grid and Distribution Codes. He also ordered an official inquiry to determine responsibility for violations and ensure accountability within the system.
In addition, Discos have been directed to coordinate with the Independent System and Market Operator (ISMO) to ensure that electricity dispatch follows the Economic Merit Order principle. This mechanism prioritizes electricity generation based on the lowest incremental cost, aiming to improve efficiency and reduce financial losses.
A follow-up directive from the Power Division further barred any off-merit electricity procurement from SPPs without prior approval from ISMO, reinforcing tighter control over purchasing decisions.
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The move reflects growing pressure on Pakistan’s energy sector to address inefficiencies and reduce the financial burden on consumers, as rising electricity costs continue to remain a major public concern.