ISLAMABAD: The Public Accounts Committee expressed grave concern over the ballooning capacity payments to Independent Power Producers (IPPs), persistent power outages despite surplus generation, and punitive electricity billing policies, calling for urgent reform and transparency across the power sector.
Chaired by MNA Junaid Akbar Khan, the PAC reviewed audit objections related to the Power Division for the financial year 2023-24. In response to queries, Power Secretary Dr. Fakhar Alam Irfan said the financial implications of the proposed relief would be assessed and shared with the PAC.
The PAC directed the Auditor General’s office to conduct special audits of IPPs and pending distribution schemes, reiterating that unchecked inefficiencies in the power sector are jeopardizing economic stability. It also directed the Power Division not to penalize electricity consumers who exceed the 200-unit threshold with a higher tariff for the next six months, offering temporary relief to millions of households. PAC Chairman Junaid Akbar Khan said “If the relief is extended, the government should account for it through additional subsidies.”
The PAC was also told that the number of domestic consumers using up to 200 units had increased from 11 million to 18 million in just a few years. Secretary Power Division said 58pc of all consumers fall under this category. “Even at 201 units, subsidy applies. We are open to reviewing the six-month penalty duration,” the secretary said and added in future, “electricity subsidies will be need-based, not consumption-based.” A BISP-linked mechanism is being devised to identify and support genuinely poor households with direct cash transfers starting 2027.
He also informed the PAC that Pakistan Pakistan has submitted two proposals to the IMF for cheaper electricity supplies and awaits a response. “One proposal suggests offering electricity to existing industries for second shifts at global rates, while the second targets new sectors like crypto and data centers with discounted power tariffs.”
The committee was informed that electricity generation payments are made per kilowatt unit, including capacity charges. Officials noted the total capacity payments from 2015 to 2024 have reached Rs1.43 trillion, and all IPPs have cleared performance testing, verified by audit authorities. The committee was informed that the installed capacity of IPPs had surged from 9,765 MW in 2015 to 25,642 MW in 2024. Correspondingly, the annual capacity purchase price ballooned from Rs141bn in 2015 to Rs1.4trn this year. The members questioned whether the nation was receiving value for this growing financial burden.
Shazia Marri questioned the rationale behind prolonged load shedding in Sindh and Khyber Pakhtunkhwa despite surplus generation, saying, “Why are people suffering 16-hour blackouts when there’s excess electricity?” She also pointed to years of delay in exploiting Thar coal for cheap energy, blaming mafia pressures for the policy paralysis. Omar Ayub criticized the government’s passive stance, reminding the committee that the PTI government had already extended such incentives during the Covid-19 period. “The government must stop waiting for IMF dictation and make bold decisions on its own,” he said.
The power secretary said that Thar coal is now producing the cheapest electricity in Pakistan, and the government is planning to extend its use. “We will soon lay railway tracks to connect Thar coal with other power plants. Jamshoro plant is also being shifted to local coal,” he said. He clarified that no new power plants based on imported fuels will be approved in the next 10 years. “The focus is on hydropower, local coal, and renewables. Reforms are also being introduced to reduce the burden of cross-subsidy on industrial and commercial users,” he said.
Chairman Junaid Akbar Khan questioned why surplus electricity wasn’t being routed to support industrial and agricultural sectors. Secretary Power Division responded that technical and commercial losses on certain feeders were high, and any major policy shifts required clearance from IMF. “We are under IMF obligations, and every major decision must be aligned with the programme,” he added.