ISLAMABAD: Pakistan has ordered an inquiry after power distribution companies were found buying electricity from smaller private plants (SPPs) at higher-than-approved rates, potentially increasing costs for consumers, according to a statement said on Thursday.
The decision was taken during a review of state-run utilities revealed that some of them had been procuring electricity outside the national “merit order,” a system that requires cheaper power to be used first to keep overall costs down.
Federal Power Minister Awais Ahmed Khan Leghari directed companies to immediately halt such purchases and comply with rules set by the National Electric Power Regulatory Authority.
“Federal Minister of Power Division ... has taken serious notice regarding the off-take of power from Small Power Producers,” the statement said.
He also ordered an investigation into the practice and instructed utilities to coordinate with the Independent System and Market Operator (ISMO) to ensure that electricity is dispatched strictly on a least-cost basis.
The statement said the ministry had instructed all distribution companies not to buy electricity from small private plants at higher-than-approved rates without prior clearance from the system operator.
It added that such purchases would only be allowed when the power is among the cheapest available under the national dispatch system.
