ISLAMABAD: Power Minister Awais Ahmad Khan Leghari announced on Thursday that the government would challenge the power sector regulator’s decision by filing a review petition with the National Electric Power Regulatory Authority (Nepra) to reassess K-Electric’s (KE) tariff structure.
He underlined that power companies should achieve profitability through operational efficiency, not by depending on subsidies or external assistance.
Speaking at a media briefing after a workshop on “Reforms in the Power Sector,” Leghari stated, “We are working to ensure that neither the federal government nor the power consumers are burdened by inefficiencies.”
He stressed that performance-based profits must drive the power sector. “As we move toward privatisation, K-Electric and other private investors should focus on efficiency for profits, not subsidies,” he said, calling for strong regulatory enforcement in distribution companies (DISCOs).
Leghari added that the government would approach Nepra to guarantee affordable electricity for consumers, highlighting that K-Electric’s tariff burden is indirectly shared by consumers of other DISCOs through taxes. “We expect Nepra to make decisions that benefit both consumers and the nation,” he remarked.
Discussing net metering, Leghari said stakeholder consultations had been completed and a revised policy was ready. “If approved, the new policy will be implemented within a month,” he added.
He also pointed out that climate change had reduced hydropower output, forcing Pakistan to rely on costlier power sources. “Fuel cost adjustments (FCAs) change monthly due to generation cost fluctuations,” he explained.
Leghari noted that electricity costs had fallen significantly, with industrial rates dropping by 31% and household tariffs down 50% for 18 million consumers. However, he acknowledged that hydropower generation had declined because of climate change, necessitating reliance on more expensive generation options.
On the issue of circular debt, he revealed the government’s plan to secure bank loans to resolve the growing debt.
He assured that sufficient electricity was available for grid supply over the next three years and highlighted key reforms implemented in the past year to ease the burden on consumers.
Leghari firmly denied any increase in electricity prices, saying, “The government has not raised tariffs at all. In fact, industrial tariffs have been cut by 30% over the past year. We are committed to achieving long-term, sustainable tariff reductions.”
He said Pakistan was experiencing a renewable energy revolution. “Over the past year, we’ve conducted comprehensive research and analysis in the energy sector and have also revisited agreements with independent power producers (IPPs). This has contributed to falling electricity prices.”
Leghari also emphasised solar energy as a promising and increasingly important power source.
He criticised previous energy sector planning as unrealistic, reaffirming the government’s determination to achieve sustainable tariff reductions and citing rapid progress in alternative energy sources.
During the Covid-19 pandemic, energy demand rose, Leghari noted, and the government is now working to separate itself from future electricity procurement. He also mentioned that integrating Bhasha Dam into the power grid would be a major milestone.
Leghari said the government was focused on protecting consumers from the effects of past mismanagement in the power sector. While reforms in the transmission sector were in progress, he noted the current lack of modern technology to assess transformer and feeder load pressures.
Regarding thermal power plants, he said the government aimed to ensure that coal- and gas-based generation would not harm the environment.
In response to a question, Leghari said the cabinet had directed a review of the net metering policy. Stakeholder consultations and feedback would be sought before the cabinet’s final approval and implementation of the revised policy.
