The Senate Standing Committee on Power has directed the National Electric Power Regulatory Authority (NEPRA) to submit five years of balance sheets for various power plants to review their return on investment, amid concerns about high profits and rising electricity costs. The directive was issued during a committee meeting chaired by Senator Mohsin Aziz at the Parliament House, where several major issues in the power sector were discussed.
A key topic was the fate of the 207 MW Madyan and 88 MW Gabral hydropower projects in Khyber Pakhtunkhwa. The Special Assistant to the Chief Minister of KP on Energy reported that land worth Rs. 5 billion had been purchased for these projects and significant progress had been made, but the federal government had removed them from the Indicative Generation Capacity Expansion Plan (IGCEP). Federal Minister for Power Awais Ahmad Leghari explained that KP authorities had not fully presented the CCI-approved power policy and that including these projects could raise electricity prices by Rs. 6 per unit by 2034. The minister noted that the Power Division removed 8,000 to 10,000 MW of projects, including several CPEC initiatives, to avoid burdening the public with higher costs.
Minister Leghari also informed the committee that the government had terminated contracts with five Independent Power Producers (IPPs) and renegotiated others, resulting in estimated savings of Rs. 3.4 trillion over four to five years. He said efforts to reduce losses in distribution companies had saved Rs. 191 billion this year alone. While acknowledging persistent electricity theft, Leghari stated that the target of establishing a competitive market had been met, freeing the government from mandatory power purchases.
The committee also examined the costs and tariffs related to captive power plants, imported coal and LNG projects, and policies for consumers in the protected category. The Chairman called for a review of these policies, urging that multiple tariff slabs be introduced to prevent sharp increases for vulnerable consumers. The Secretary of the Power Division assured that subsidies are currently being provided to users consuming up to 200 units and confirmed that a policy reassessment is underway.
Senator Mohsin Aziz appealed to both the federal and provincial governments to reconsider their stance so that the KP hydropower projects could move forward, benefiting both the province and the country. He also asked the Federal Minister to set aside minor discrepancies in favor of including the projects in the IGCEP.
The issue of Net Hydel Profit (NHP) payments to provinces was also discussed. While NEPRA officials said NHP is being paid, KP officials argued the payments are too low and arrears are accumulating. The committee recommended that NEPRA clear the backlog and make substantial monthly payments to provinces, suggesting at least Rs. 5 billion per month be allocated to KP.
Regarding wheeling charges, Minister Leghari announced recent amendments to NEPRA rules, replacing a standard rate of Rs. 28 with a base rate of Rs. 12, with final approval pending from NEPRA.
Lastly, Senator Mohsin Aziz highlighted concerns about excessive returns on investment for some IPPs, noting that returns for certain projects have reached as high as 100 percent. NEPRA attributed these high returns to dollar-based payments. The committee requested that NEPRA present the last five years of balance sheets for each power plant in the next meeting for a detailed review.
The meeting was attended by several senators, federal officials, and stakeholders from the power sector.
