ISLAMABAD: The government is considering extending electricity to industry for three years at marginal cost, review of net metering regulations, elimination of uniform tariff, and restriction on procurement of electricity through CPPA-G over and above committed projects of 7000 MW.
These key points were shared by Power Minister Awais Leghari during a Pakistan Business Council (PBC) event, in a conversation with Kamran Kamal, CEO of Hubco.
Leghari emphasised that following the privatisation of Distribution Companies (Discos), a uniform tariff system will be abolished in favour of creating competition between companies based on performance. He criticised the current tariff system, stating it is no longer viable.
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He further revealed that eight out of ten Discos will be privatized, with financial advisors set to be appointed by the first week of February. “If a uniform tariff did not exist across the country, the performance of K-Electric in terms of losses and recovery wouldn’t be as it is today,” he said.
Leghari also mentioned the government’s winter incentive package, which provides a rate of Rs 26.07 per unit for all consumer categories. He proposed extending this incentive for three years to the industrial sector at marginal cost, urging industry representatives to submit their five-year growth plans, excluding the summer months when electricity demand peaks at 29,000 MW.
“I don’t want to keep any units for myself,” he stated. “I’m willing to sell electricity to the industry at Rs 12 or Rs 15 per unit to minimise capacity payment impacts.” He emphasised that industry’s demand must increase, as there is no alternative.
In response to a question, Leghari confirmed the government’s ongoing energy sector reforms and efforts to reduce electricity tariffs. Since June 2024, the tariff for industry has already decreased by Rs 11 per unit. Industry demand rose by 7% in December 2024, partly due to the winter incentive package.
Addressing net metering, the minister pointed out that it currently burdens other consumers, with a cost of Rs 100 billion. This figure is expected to rise to Rs 500 billion over the next five years unless buyback rates are adjusted. He hinted at a new buyback rate of around Rs 10 or Rs 12 per unit.
Leghari also discussed the government’s plan to provide electricity to Special Economic Zones (SEZs) at a single point and allow distribution companies to sell power directly to their consumers through tariffs.
Looking ahead, he noted that by 2025, electricity trading will no longer be the government’s responsibility. Power companies and consumers will be able to buy and sell cheaper electricity at will through the Centralized Trading Bilateral Contracts Market (CTBCM), which will be fully operational in the coming years.
Copyright Business Recorder, 2025
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