- Senate committee says regulator favors power producers over consumers, regretting millions paying for unused electricity as IPPs escape scrutiny
- Calls for forensic audits of all power plants and new capacity, proposing industrial tariffs to ease winter electricity burden
- Lawmakers warn capacity payments could rise to Rs5 trillion annually, criticizing K-Electric for prolonged outages and unchecked deposits
KARACHI: Senior Pakistani lawmakers on Saturday sharply criticized the country’s power regulator, accusing it of prioritizing electricity producers over consumers as capacity payments and persistent load-shedding continue to burden households and industry.
The criticism came during a meeting of the Senate Standing Committee on the Cabinet Secretariat at the Sindh Secretariat, where officials of the National Electric Power Regulatory Authority (NEPRA) were questioned over tariffs, capacity charges, and the performance of Independent Power Producers (IPPs).
Senator Saleem Mandviwala told the committee that NEPRA, established nearly three decades ago to protect consumers, had instead become “an advocate for power producers.”
“Consumers are being charged Rs2.2 trillion for electricity that was neither generated nor used,” Mandviwala said, referring to capacity payments that remain payable even when electricity demand falls in winter.
“It has been 28 years. If low-cost electricity is not available to the public, the system has clearly failed.”
Mandviwala pressed NEPRA to move beyond technical explanations and explain how affordable electricity would be delivered to ordinary citizens. “What charges are being applied per unit, and what precisely is NEPRA’s role?” he asked.
The meeting, chaired by Senator Rana Mahmoodul Hassan, was convened to review the Solar Net Metering Policy and other regulatory matters. Senators Kazim Ali Shah, Muhammad Abdul Qadir, and Attaur Rehman attended, while Sindh Assembly members Shariq Jamal and Asif Musa participated at the committee’s invitation. Prominent businessman Zubair Motiwala was also present.
Supporting Mandviwala, Senator Abdul Qadir said government claims of falling electricity prices and power sector reforms had failed to translate into relief for the public.
“Despite audits of IPPs and shutdowns of inefficient plants, electricity remains unaffordable for 250 million people,” he said.
Abdul Qadir also questioned why applications for 1,000MW of new electricity connections were stalled and warned that high energy costs were constraining exports.
“You are collecting Rs2.2 trillion in capacity charges. What is being done about it?” he asked, alleging that IPPs had “held the entire country hostage” without facing **forensic scrutiny of their earnings.”
The committee chair noted there was unanimous agreement on the need for a forensic audit of IPPs, covering both new capacity being added to the grid and forthcoming power projects. Abdul Qadir added that audits should also examine project feasibility, land valuation, fuel consumption, machinery output, and annual technical inspections of plants.
Responding to criticism, a NEPRA official explained that electricity tariffs consist of capacity charges and energy charges, with the former unrelated to actual consumption.
“Capacity charges cannot be reduced,” the official said, adding that only two million of Pakistan’s 40 million consumers use three-phase connections. Increasing electricity sales, he added, is the only way to ease the burden of capacity payments.
Senator Abdul Qadir rejected the explanation, arguing that people are paying for unused capacity while remaining underserved. He suggested seasonal industrial tariffs, proposing electricity at Rs10 per unit during winter to stimulate demand.
NEPRA officials maintained that governance and shareholding issues in distribution companies fall outside their remit, noting their role is limited to performance regulation, while sales remain the responsibility of distribution companies.
Businessman Zubair Motiwala said fuel adjustment surcharges and quarterly circular debt adjustments offset any reduction in unit prices. He also claimed multiple NEPRA orders against K-Electric had been stayed by courts, making it “the most protected utility in the country.”
“With a system capacity of 42,000MW, only 28,000MW is operational, yet payments are being collected for the remaining 14,000MW,” Motiwala said, warning that industry would increasingly turn to alternative energy sources.
“Major exporters have already arranged their own power. There will come a time when no one will buy electricity from the grid.”
Motiwala also questioned peak-hour tariffs, noting that circular debt had risen by Rs79 billion between July and September, and said:
“When sales fall, prices are raised. This is unsustainable.”
Sindh lawmaker Shariq Jamal said bill-paying customers were being penalized for electricity theft and non-payment by others, noting that 65% of his constituency faced load-shedding of up to 18–20 hours, despite an officially declared 12-hour schedule.
Jamal criticized K-Electric’s leadership for dismissing fines and urged NEPRA to hold public hearings in affected areas, proposing the end of monopolies through multiple distribution companies and a nationwide “pay-and-use” card system.
Musa highlighted that prolonged outages were affecting water supply due to power cuts at pumping stations, and accused NEPRA of failing to exert pressure on K-Electric. He also raised concerns over consumer deposits totaling Rs46 billion, arguing that customers should receive returns if these funds are used for business purposes.
Senator Abdul Qadir suggested elected representatives formally write to the committee chair, urging him to forward complaints to the Chief Justice of Pakistan and the Sindh High Court, terming the move an expression of public anger conveyed by elected representatives.
Warning of long-term risks, Abdul Qadir cautioned that unchecked capacity payments could rise from Rs2.2 trillion to Rs5 trillion annually, adding:
“After debt servicing, capacity payments will consume most of the revenue. Future legislation could even impose charges on solar and battery users if current trends continue.”
