ISLAMABAD: Federal Minister for Energy Awais Leghari has instructed an immediate cessation of electricity procurement that surpasses the national least-cost benchmark. This directive follows a review revealing that distribution companies (Discos) were acquiring power from Small Power Producers (SPPs) and Captive Power Plants (CPPs) at rates higher than allowed, potentially increasing costs for consumers.
In a significant development, the minister initiated an inquiry to investigate the alleged purchases by Discos outside the prescribed economic merit order. He emphasized that all power procurement must strictly comply with the regulations set by the National Electric Power Regulatory Authority (Nepra), including adherence to its Grid and Distribution Codes.
Leghari further instructed utilities to immediately halt any such off-merit purchases and align their operations with the Economic Merit Order (EMO) principles. This involves coordinating with the Independent System and Market Operator (ISMO) to ensure that power dispatch prioritizes generation with the lowest incremental cost.
Meanwhile, the Power Division issued a follow-up order prohibiting any off-merit electricity procurement from SPPs without prior explicit approval from ISMO. It clarified that power off-take should be confined strictly to cases that conform to the national merit order, which is determined through a cost-based mechanism.
The inquiry aims to establish accountability and identify those responsible for the deviations, reinforcing efforts to maintain transparency and cost efficiency in the power sector.
