By Staff Reporter
ISLAMABAD: The government said on Wednesday it has uncovered purchases of electricity by state-owned distribution companies at rates well above the national tariff, made outside the national grid in violation of economic merit-order rules amid widespread complaints about expensive power and prolonged loadshedding.
The distribution companies, known as Discos, bought electricity from small power producers and captive power plants through bilateral contracts that bypassed both the national grid and the Independent System and Market Operator, according to an official statement from the Power Division. The deals allowed the Discos to take power at higher costs than those available under the regulated national tariff, the statement said.
Authorities withheld the names of the specific Discos involved and the volume of electricity purchased to allow an independent inquiry to proceed without interference. Power Minister Awais Leghari ordered the investigation after noticing during a routine review of Disco and ISMO operations that off-take from small power producers was exceeding the national merit order. The practice was revealed as part of a broader stock-taking exercise, the statement said.
Leghari directed an immediate end to the off-grid purchases and full compliance with the National Electric Power Regulatory Authority’s grid code, distribution code and all related directives. He also instructed the Power Division to work with ISMO to bring small power producers and captive plants into the formal dispatch system so that power plants are called upon strictly according to economic merit order, ensuring the lowest possible cost to consumers.
In line with the minister’s orders, the Power Division has now instructed all Discos that no off-merit procurement from small power producers may be undertaken under any circumstances without prior explicit approval from ISMO. Any such off-take must be strictly limited to situations in which the power falls within the prevailing national merit order, calculated on the basis of incremental generation costs under the prescribed mechanism, the statement said.
The announcement comes as households and businesses across Pakistan continue to face some of the highest electricity tariffs in the region alongside frequent scheduled blackouts, fueling public frustration with the power sector’s performance and governance.
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