ISLAMABAD: With no allocation in the federal budget, the newly-established Power Planning and Monitoring Company (PPMC) — a new entity under the Power Division — has started financing its operations by charging management fees from the country’s electricity distribution companies (Discos), allegedly without authorization from the National Electric Power Regulatory Authority (Nepra), it is learnt.
According to invoices reviewed by this correspondent, PPMC collected Rs209 million from distribution companies on their distribution margins of Rs 395.669 billion collected in in the first quarter of FY2025-26 (July–September). The fee, set at 0.053 percent of each Discos’s Distribution Margin, was charged via the Central Power Purchase Agency (CPPA-G) — again, without regulatory consent, drawing ire from the stake holders.
Official invoices issued by CPPA-G show the PPMC has charged the management fee Rs24.180 million from Iesco in first quarter of FY26 from July to September period, Rs37.05 million from Lesco, Rs28.98 million from Fesco, Rs21.9 million from Gepco, Rs32.310 million from Mepco, Rs22.53 million from Pesco, Rs12.01 million from Hesco, Rs14.55 million from Qesco, RS8.34 million from Sepco, Rs1.24 million from Tesco and Rs5.91 million from Hazeco.
The issue came under scrutiny during Nepra’s Multi-Year Tariff (MYT) hearings for FY2025–26 to FY2029–30, where several Discos requested that the PPMC management fee be incorporated into consumer tariffs. However, the proposal faced stiff resistance from Nepra’s Sindh member, who challenged the very legality and rationale of the charge. “How can PPMC impose fees without the regulator’s approval? And what management services is it providing when each Discos has its own board and CEO,” the member asked during the hearing.
Sources said PPMC was created, as per the documents, through Statutory Regulatory Order (SRO) 1358-I/2025, issued on July 29, 2025, by the Power Division, rather than the Cabinet Division, which is the legal authority for forming federal entities.
Under its founding SRO, PPMC has been mandated to perform “management, planning, and monitoring” functions for power sector entities, including Discos, Gencos, and the National Transmission and Despatch Company (NTDC), while also assisting the Ministry of Energy in policy coordination.
To seek clarification, this scribe sent written questions to the Federal Minister for Power, the Secretary Power Division, and senior officials four days ago. The questions asked: under what legal authority was PPMC established through SRO 1358-I/2025 by the Power Division instead of a Cabinet Division notification? Does the creation of PPMC comply with federal administrative rules for setting up public sector companies? Was the Cabinet Committee on State-Owned Enterprises (SOEs) consulted before the SRO was issued? Has the Securities and Exchange Commission of Pakistan (SECP) formally registered PPMC as a legal entity, and under which category of company law? Why was there no budget allocation for PPMC’s operations in FY2025–26? Why was the management fee included in Discos’ tariff petitions before Nepra without legal approval? Can PPMC legally charge Discos a management fee without Nepra’s consent? And finally, will this management fee ultimately be passed on to electricity consumers through tariff adjustments, and how much additional cost per unit will that add to consumer bills? Why was Parliament not informed or asked to approve the company’s establishment, given its national financial implications?
In response, a spokesman for the Power Division stated: “For purposes of clarity, Power Planning & Monitoring Company (PPMC) is a duly registered legal entity with SECP, as previously Pakistan Electric Power Company (Private) Limited (Pepco) was incorporated in 1998 and later renamed to PPMC, pursuant to the restructuring of Pepco as decided by the federal cabinet vide its decision dated 27th October 2021.”
He further clarified that the SRO 1358-I/2025 deals only with the Standard Operating Procedures (SOPs) for continuation of management fee collection in line with the cabinet’s decision and does not pertain to the creation of PPMC. “PPMC is fully compliant with the requirements of applicable laws, including the State-Owned Enterprises Act, 2023, and SECP regulations,” he added.
The spokesman elaborated that under amendments made to the Nepra Act, 1997 (specifically Section 14A), and as per the National Electricity Policy and National Electricity Plan (2023–2027) approved by the federal government, PPMC has been designated as the entity responsible for monitoring the implementation of these frameworks. “Hence, PPMC’s role is fully aligned with power sector reforms pursuant to the Federal Cabinet decision, Nepra Act, National Electricity Policy, and National Electricity Plan,” the official said.
Regarding the funding issue, he explained that there was no requirement for federal budget allocation, as the Cabinet had directed continuation of management fees as part of Discos’ Operations and Maintenance (O&M) expenses. “The management fee has historically been charged to Discos as part of their O&M expenses. Therefore, there is no requirement of charging to the federal budget,” he concluded.