Federal Minister Awais Leghari Halts High-Tariff Power Procurement by DISCOs
Minister Leghari Identifies Off-Merit Power Procurement Irregularities
Federal Minister for Power Division Sardar Awais Ahmed Khan Leghari took formal notice on Wednesday regarding the unauthorized off-take of electricity from Small Power Producers (SPPs) and Captive Power Plants (CPPs). The issue was identified during a comprehensive stock-taking session of Distribution Companies (DISCOs). It was revealed that certain DISCOs were procuring power at tariffs that exceeded the prevailing national merit order, leading to unnecessary financial burdens. The Minister characterized this practice as a violation of established protocols and underscored the need for immediate corrective action to protect the interests of the national power grid and its consumers.
Immediate Discontinuation of Non-Compliant Tariffs Mandated
In a press release issued following the discovery, Minister Leghari directed all DISCOs to immediately discontinue the practice of off-merit power procurement. He emphasized that all power off-take must be brought into strict consistency with the provisions of the National Electric Power Regulatory Authority (NEPRA) Grid Code and Distribution Code. The Minister stated that there would be zero tolerance for procurement activities that bypass regulatory directions, asserting that the integrity of the national energy framework depends on uniform adherence to these established legal and technical guidelines.
Formal Inquiry Launched Into DISCO Procurement Practices
To address the root cause of these irregularities, the Federal Minister ordered a formal inquiry into the matter. The investigation will focus on identifying the specific instances where DISCOs deviated from the merit order and the decision-making processes that led to these costly procurement choices. The results of this inquiry are expected to inform further administrative and regulatory reforms within the Power Division. This move is part of a broader transparency initiative aimed at holding utility providers accountable for their operational and financial management under the current administration.
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Coordination with ISMO to Ensure Economic Merit Order Compliance
Minister Leghari directed the Power Division to coordinate closely with the Independent System and Market Operator (ISMO). The objective is to ensure that SPPs and CPPs are only included in the power dispatch schedule when they align with the Economic Merit Order (EMO) principles. By prioritizing the least-cost options for consumers, the government intends to optimize the dispatch of power plants based on incremental generation costs. This strategic alignment is intended to prevent the systemic inefficiencies caused by the inclusion of high-cost power sources when more economical alternatives are available.
New Directives Require Prior Explicit Approval for SPP Off-Take
In direct response to the Minister’s orders, the Power Division has issued a series of instructions to all DISCOs nationwide. The new directives strictly prohibit off-merit procurement from SPPs under any circumstances without first obtaining prior and explicit approval from the ISMO. This centralized oversight mechanism is designed to act as a safeguard against unilateral procurement decisions by local distributors. The Power Division reaffirmed that electricity off-take must remain strictly limited to cases where the power generated falls within the national merit order, as determined by a prescribed technical mechanism.
Focus on Consumer Relief and Energy Sector Sustainability
The recent directives are part of a larger effort by the federal government to stabilize electricity prices and improve the sustainability of the energy sector. By enforcing the National Merit Order, the Power Division aims to reduce the overall cost of generation, which ultimately impacts the bills of domestic and industrial consumers. Minister Leghari reiterated that the government’s priority is to achieve the lowest possible cost of service while maintaining grid stability. These reforms are seen as essential steps toward resolving the circular debt crisis and ensuring a more predictable and efficient power supply across Pakistan.
