The Energy Minister has issued a directive to stop electricity purchases above the national least-cost benchmark. The minister, Awais Leghari, has also launched an investigation into distribution companies (Discos) for allegedly buying power from Small Power Producers (SPPs) and Captive Power Plants (CPPs) at tariffs higher than the permitted rates. This decision was taken after a review uncovered that some Discos had been purchasing power off-merit, which inflates consumer costs.
Leghari emphasized that all utilities must align their power procurement practices with the National Electric Power Regulatory Authority (Nepra) guidelines and Grid and Distribution Codes. The inquiry aims to hold responsible parties accountable and ensure transparency in energy procurement processes. Discos have been instructed to work closely with the Independent System and Market Operator (ISMO) to ensure that energy from SPPs and CPPs is dispatched strictly under the Economic Merit Order (EMO) principle, which prioritizes the lowest-cost generation.
Furthermore, the Energy Minister has ordered a halt to any off-merit electricity purchases from SPPs unless explicitly approved by the ISMO. This measure is part of the government’s ongoing efforts to regulate energy procurement effectively and lower costs for consumers. The Power Division has made it clear that any future purchases must adhere to the national merit order, using a cost-based mechanism to determine the most efficient and affordable options.
