In response to growing public frustration over inflated electricity bills, the Senate Standing Committee on Cabinet Secretariat has called for a forensic audit of independent power producers (IPPs). This decision comes amidst nationwide protests against the high cost of electricity, including a sit-in organized by the Jamaat-e-Islami in Rawalpindi.
The Issue of High Electricity Bills
Pakistanis have been grappling with exorbitant electricity bills, a significant portion of which includes capacity payments to IPPs. These payments are made to power producers regardless of whether they generate electricity or not, which has sparked widespread outrage.
During a committee meeting chaired by Senator Rana Mahmood ul Hassan, National Electric Power Regulatory Authority (Nepra) Chairman Waseem Mukhtar addressed the members. He highlighted the complexities of balancing the interests of the government, power companies, and consumers.
Future Plans and Acknowledgment of Past Mistakes
Mukhtar announced that new electricity generation plants would be installed, with plans to open the commercial market by October or November. This would allow consumers to choose their electricity provider, fostering competition and potentially lowering prices.
Acknowledging past errors, Mukhtar reflected on the power crisis of 2007 and the subsequent installation of power plants in 2013-14 with Chinese assistance. “We thought the GDP would grow at 6%; in line with this, we added electricity to the national grid. We went into overcapacity due to our sentiments. Our demand has come down,” he explained.
Economic Stability and Investor Confidence
Mukhtar stressed that the government had provided incentives to companies during the power shortage, often in dollars, due to the instability of the Pakistani rupee. He emphasized that stabilizing the economy and boosting investor confidence are crucial to preventing further increases in electricity prices.
Senator Abdul Qadir voiced concerns about the financial practices of IPPs, accusing them of overpricing and making substantial profits over the past decade. He strongly supported the call for a forensic audit to ensure accountability and transparency.
Committee’s Decision
Committee Chairman Hasan concurred with the need for a forensic audit, noting the widespread public outcry over the issue. The committee’s decision aims to address the grievances of the populace and ensure that power producers are held accountable for their pricing practices.