The federal government has ordered an independent investigation into electricity purchases made by power distribution companies outside the national grid, after some utilities were found to have procured costly power in violation of the country’s economic merit order.
The move comes at a time of growing public anger over high electricity prices and persistent loadshedding.
In a statement issued on Wednesday, the government said some distribution companies, or Discos, had been buying electricity from small power producers and captive power plants through bilateral arrangements at rates higher than the national tariff.
According to the statement, the power was procured outside the national grid and without routing supply through the Independent System and Market Operator.
The government did not disclose the names of the companies involved or the volume of electricity purchased, saying the details were being withheld to allow the inquiry to proceed independently.
Power Minister Awais Leghari took notice of the practice after it surfaced during a stock-taking exercise involving distribution companies and the market operator, the statement said.
Leghari ordered the immediate discontinuation of off-merit procurement and directed that future power purchases be brought in line with the Nepra grid code, distribution code and other regulatory requirements.
He also instructed authorities to coordinate with the market operator so that small power producers and captive plants are included in dispatch decisions only when they meet least-cost criteria under the economic merit order.
Following the minister’s directions, the Power Division said it had instructed all distribution companies not to procure electricity from small power producers without prior approval from the Independent System and Market Operator.
It added that off-take from such plants would only be allowed when the electricity falls within the prevailing national merit order, determined on the basis of incremental generation cost under the prescribed mechanism.
