Govt Orders Probe Into Costly Off-Grid Power Purchases by Discos
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The federal government has ordered an independent investigation into electricity purchases made by power distribution companies outside the national grid after saying some utilities had procured costly power in violation of the country’s economic merit order.
The move comes amid mounting 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.
The purchases were made outside the national grid and without routing supply through the Independent System and Market Operator, it said.
The government did not disclose the names of the distribution companies involved or the volume of power procured, saying the details were being withheld to allow an independent inquiry to proceed.
Power Minister Awais Leghari took notice of the practice after it emerged during a stock-taking exercise involving the Discos and the Independent System and Market Operator, according to the statement.
Leghari ordered the immediate discontinuation of off-merit power procurement and directed that future purchases be brought into line with the Nepra grid code, distribution code, and other regulatory directions.
He also instructed authorities to coordinate with the market operator to ensure the inclusion of small power producers and captive plants in dispatch decisions only in cases where they meet the 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 said off-take from such plants would be allowed only when the electricity falls within the prevailing national merit order, determined on the basis of incremental generation cost under the prescribed mechanism.
