National Electric Power Regulatory Authority (NEPRA) Chairman Wasim Mukhtar has acknowledged the errors related to the high electricity prices charged by Independent Power Producers (IPPs).
Mukhtar stated that providing dollar payments as incentives to companies setting up power plants was a mistake. He emphasized that stabilizing economic conditions and instilling investor confidence would prevent future increases in electricity prices.
Mukhtar announced the commercial market would open in October and November, allowing consumers to select their preferred electricity providers. He emphasized that balancing the interests of the government, electricity companies, and consumers remains the most challenging task. Currently, there are no plans to establish new electricity generation plants.
Reflecting on past decisions, Mukhtar admitted to making mistakes, especially after the severe electricity shortage 2007. Between 2013 and 2014, they established power plants with Chinese assistance and offered dollar payments as incentives due to the instability of the local currency. This policy led investors to demand payments in dollars. Mukhtar reiterated the importance of maintaining economic stability and investor confidence to prevent hikes in electricity prices.
Senator Abdul Qadir highlighted that IPPs have profited over the past decade through overpricing, suggesting the need for a forensic audit and rigorous monitoring. Committee members observed that rising electricity prices have caused public dissatisfaction, holding the 40 IPP families responsible for the unrest among the population.
An annual report on IPP payments revealed tax-free payments to five major powerhouses in the energy sector. According to the report, Hub Power received payments of 260 billion rupees at 16% capacity, Engro received 74 billion rupees at 54% capacity, Lucky Group received 62 billion rupees at 28% capacity, and Sapphire received 34 billion rupees at 34% capacity annually.
