ISLAMABAD : Minister for Power Sardar Awais Ahmad Khan Leghari on Sunday strongly criticised the National Electric Power Regulatory Authority (NEPRA) for what he termed “distorted facts” in its State of Industry Report 2024-25, released two days earlier.
This is a rare instance of a sitting power minister publicly rebutting claims made by the regulator through national media instead of formally conveying the government’s concerns.
Responding to questions during a press conference, Leghari said the government fully respects NEPRA’s independence but considered it necessary to place its version of facts before the public.
“We have no dispute with anyone, nor do we intend to silence the regulator. NEPRA is independent and must remain so. However, the interpretation of the State of Industry Report required rebuttal so that facts could be transparently shared with the public,” he said.
The minister stated that projections indicate a surplus capacity margin of up to 8,700 MW, which increases generation costs and ultimately leads to higher consumer tariffs, as most power plants operate under “take-or-pay” or “must-run” contracts. He added that the installed generation capacity had passed through the due regulatory process, including licensing and tariff determination.
To mitigate the impact of surplus capacity, Leghari said the government has introduced a three-year surplus power package for industrial and agricultural consumers at discounted rates to stimulate demand and improve asset utilisation. He added that a significant number of captive power consumers have shifted to the national grid.
He expressed concern that the integrity of the Indicative Generation Capacity Expansion Plan (IGCEP) has increasingly been affected by considerations beyond technical system planning. When project inclusion or exclusion is influenced by factors other than least-cost analysis, demand forecasting, resource optimisation and grid integration studies, he said, the neutrality and credibility of the planning process are compromised.
Historically, the minister said, NEPRA approved IGCEPs without proper due diligence regarding committed projects, particularly the timely availability of evacuation arrangements. However, he said the government-submitted IGCEP 2025-35 marks a fundamental shift in power sector planning, excluding 7,967 MW of high-cost and non-essential generation projects and prioritising low-cost, indigenous and renewable energy sources, with projected savings exceeding $17 billion.
Leghari acknowledged that delays in project execution remain a persistent challenge in several major transmission initiatives, primarily due to Right of Way acquisition and procurement issues faced by NTDC. To address these challenges, he said the Ministry of Energy has separated the project development function into an independent entity — the Energy Infrastructure Development and Management Company (EIDMC). The new company will be responsible for timely project execution and for reforming policy and regulatory frameworks to enable efficient Right of Way acquisition and streamlined procurement. Managing Director NGC has been appointed to prioritise these initiatives.
On distribution sector inefficiencies, the minister said losses beyond regulatory targets are neither passed on to consumers nor accumulated in circular debt. Instead, such losses are covered through fiscal support. He added that regular loss-monitoring mechanisms are in place and that inefficiency figures are transparent and verifiable.
He further stated that the reconstitution of DISCO boards is expected to strengthen governance and reduce inefficiencies across distribution companies. Future reductions in losses will directly benefit taxpayers by lowering fiscal dependence. In the current year alone, fiscal burden has already been reduced by Rs 400 billion, from Rs 1,287 billion to Rs 893 billion.
Highlighting incorrect billing as a major driver of non-payment and low recoveries, Leghari said several corrective measures have been implemented. These include the introduction of proportionate billing not exceeding 30 days to prevent overbilling, the launch of the Apni Meter Apni Reading application, installation of AMI meters, and refunds exceeding Rs 40 billion to consumers for overbilling.
Weak recovery performance, he said, remains another key contributor to circular debt. However, recoveries have shown significant improvement. DISCO recoveries increased from 92.4% in FY24 to 96.6% in FY25, reducing the financial impact from Rs 315 billion to Rs 132 billion. During July–December FY26, recoveries improved by a further Rs 43 billion. He added that recoveries from government departments are now being ensured through 25% at-source deductions from the Federal Adjuster against verified bills.
Addressing circular debt, the minister rejected NEPRA’s assertion that a Rs 780 billion reduction resulted primarily from commercial financing. He said the reduction was achieved through multiple contributors, including reduced DISCO losses (Rs 193 billion), successful late payment interest (LPI) waiver negotiations with power producers (Rs 260 billion), and improvements in macroeconomic indicators (Rs 300 billion). Contrary to the regulator’s claim, he said circular debt financing was secured only in December 2025.
To service the cost of borrowing undertaken to manage inefficiencies of power sector entities, the minister said most electricity consumers — except certain protected domestic categories — are paying Rs 3.23 per unit under the Debt Servicing Surcharge (DSS). However, he clarified that it is factually incorrect to state that an additional Rs 3.23 per unit has been imposed, as the DSS currently being charged will continue to apply.
He added that once circular debt is fully settled over the next five to six years, the DSS will be eliminated. “Previously, there was no plan to retire the circular debt stock and eliminate the surcharge,” he said.
Leghari noted that K-Electric (KE), the country’s only private distribution company, has not contributed to circular debt in recent years as it absorbs higher transmission and distribution losses and lower recoveries instead of passing them on to consumers. Nevertheless, KE consumers are still subject to DSS. He acknowledged, however, that KE contributed to circular debt accumulation in the past by not paying dues to CPPA-G, with unpaid amounts reaching Rs 640 billion by June 2023. Receivables from KE stand at over Rs 300 billion as of November 30, 2025. He added that KE has benefited from lenient regulatory targets, resulting in subsidies exceeding Rs 500 billion to its consumers over the past five years.
The minister rejected claims that circular debt accumulation remains uncontrolled, stating that it has been contained since 2022 and reduced from Rs 2.4 trillion to Rs 1.6 trillion last year. He said that under the six-year circular debt settlement plan, the government is committed to gradually reducing DISCO inefficiencies, lowering fiscal dependence, and eliminating both circular debt stock and flow.
Responding to concerns regarding AMI meters, Leghari said over 1.6 million meters have already been installed across domestic, commercial, industrial and agricultural consumers, supported by fully functional Head-End Systems and Meter Data Management Systems with PITC support. AMI communication availability exceeds 90% in several DISCOs, and complete replacement of all three-phase meters is targeted by December 2026.
On electricity tariffs, the minister rejected the assertion that rising prices have made grid power unaffordable, stating that since the government assumed office in March 2024, the national average tariff has been reduced from Rs 53.04 per unit to Rs 42.27 per unit by December 2025. He said the government continues efforts to further reduce tariffs through incentive packages, tariff renegotiations and debt refinancing.
Responding to concerns about the Independent System and Market Operator (ISMO), Leghari said NEPRA issued its licence after proper due diligence regarding human resources, technical capacity and IT infrastructure. He added that ISMO has demonstrated its operational capability through successful trial runs endorsed by the regulator.
Since ISMO’s formation in April 2025, he said, key milestones have been achieved, including the establishment of an independent board, implementation of ERP and IT-based auction platforms, and hiring of professionals and consultants.
Clarifying the role of the Power Planning and Monitoring Company (PPMC), the minister said it has not been established to exercise centralised operational control over DISCOs, which continue to operate independently through their boards. PPMC’s role, he said, is limited to centralised monitoring and reporting of technical performance on behalf of the Ministry of Energy to improve efficiency, reduce costs and enhance customer service. Ends
