IPPs’ review completed, tariff relief expected: Leghari

ISLAMABAD: Federal Minister for Power Awais Ahmad Khan Leghari on Friday announced that the Power Sector Task Force has completed its review of Independent Power Producers (IPPs) and state-run power plants. With the mutual consent of these generators, tariff reductions are expected to benefit consumers in the coming weeks.

Leghari made the remarks during a briefing to the Senate Standing Committee on Power, which met under the chairmanship of Senator Mohsin Aziz. He informed the panel that the taskforce had conducted a comprehensive assessment of the return on equity (ROE), operation and maintenance (O&M) costs, and outstanding dues of the IPPs.

“The committee has been provided with all necessary information regarding the IPPs,” Leghari said. “We will soon share good news with the public about the IPPs.” Leghari stressed that the government is not taking any unilateral steps in its negotiations with IPPs. “All work is being carried out with the confidence and consent of the IPPs,” he added. The review also included a thorough evaluation of investment technology and associated costs for each plant. According to the minister, further announcements regarding progress with IPPs will be made in the coming weeks.

The panel addressed a significant public concern regarding electricity overbilling, brought to light by Senator Palwasha Muhammad Zai Khan during a meeting on Aug. 30. The senator criticized the indifference of officials to consumer grievances and shared her family’s experience of having to visit the power office 28 times in three months due to incorrect meter readings. Senator Palwasha condemned the behavior of officials, likening it to mafia conduct, and called for stringent action against those responsible. She proposed referring the matter to the Federal Investigation Agency (FIA) to dismantle the alleged group behind the malpractice and set a precedent for accountability. “If my family can face such treatment, imagine the hardships of the average consumer,” she stated.

Committee Chairman Senator Mohsin Aziz acknowledged the senator’s concerns, agreeing that the issue was of public importance and likely indicative of a broader problem. A senior official from the Power Division confirmed that action had already been taken, including the transfer of the employee responsible for the faulty meter readings.

The Minister of Power Division Awais Leghari remarked that the senator’s concerns fell under customer care, which is not directly part of electricity distribution companies. He mentioned the existence of a complaint hotline, 118, which was earlier not too efficient. He said that the ministry is working on implementing a computerized system at the subdivision level and revamping it to ensure complaints are resolved with equal importance. He emphasized that simply transferring people is not the solution; they are striving to make real changes.

Senator Mohsin Aziz stressed the urgent need to address electricity theft and overbilling, instructing the Power Division to clarify inconsistencies in reports regarding Bagasse-based Independent Power Producers (IPPs) and their tariff structures. He raised concerns over the pricing of bagasse, suggesting that its historical valuation has led to exploitation.

During the panel meeting, Nepra Chairman Waseem Mukhtar informed the committee, “We have no price of Bagasse,” but noted that the authority determines tariffs for Bagasse-based power plants. Bagasse pricing is not regulated in Pakistan, he added. In response, Aziz said it is inaccurate to say the price cannot be determined. He criticized what he termed the “sugar mafia” for benefiting from this lack of regulation, questioning how India could regulate bagasse pricing while Pakistan could not. Senator Aziz pressed further, asking why bagasse pricing was not considered when upfront tariffs were awarded. Mukhtar replied that, without a regulated price, it could not be factored in. Aziz urged the ministry to reassess bagasse pricing and submit a report on the issue.

Pakistan’s eight bagasse-based Independent Power Producers (IPPs), with a combined capacity of 259.28 MW, are operating under the 2006 power policy, with agreements set to expire between 2044 and 2049. The IPPs include Almoiz Industries, Chanar Energy, Chiniot Power, Hamza Sugar Mills, JWD Sugar Mills (Plants II and III), RYK Mills, and Thal Industries.

The committee also reviewed a detailed report on load-shedding and electricity distribution from Pesco and Sepco. MNA Asif Khan who was called on special invitation raised concerns about overbilling and theft in his constituency. Senator Aziz pointed out discrepancies in feeder data, particularly regarding line losses attributed to incorrect areas. Senator Aziz recommended organizing feeder data into six-month periods and categorizing load-shedding for clearer insights. He criticized the poor treatment of consumers by Pesco and Sepco and called for accountability regarding electricity theft. The committee plans to investigate further into potential corruption within the relevant departments.