Non-operational IPPs: Senate panel questions billions in capacity payments

ISLAMABAD: The Senate Standing Committee on Cabinet Secretariat expressed serious concern over billions of rupees in capacity payments to non-operational Independent Power Producers (IPPs) and strongly criticized the National Electric Power Regulatory Authority (NEPRA) and IPPs for undermining the government’s solar energy policy. The Committee also unanimously called for accountability, directed a comprehensive performance audit of NEPRA, and decided to refer the matter of the unauthorized increase in the salaries and allowances of its Chairman and members to the Public Accounts Committee (PAC) for detailed examination. The Committee met here on Tuesday with Senator Rana Mahmood Ul Hassan in the chair. READ MORE: ECC approves Rs4bn for IPP arbitration proceedings The Committee discussed issues relating to telecommunications regulation, NEPRA’s salaries and performance, circular debt, IPPs, and implementation of the Committee’s recommendations regarding the upper age limit and number of attempts for the CSS Competitive Examination. During the briefing on circular debt and capacity payments to IPPs, members raised serious concerns over substantial capacity payments being made to non-operational power plants, describing the practice as an unnecessary burden on electricity consumers. The Committee also criticized NEPRA for failing to provide tariff determination details despite repeated directions and observed that certain IPPs had, prima facie, played a role in undermining the government’s solar energy policy. The Committee further discussed the installation of imported coal- and RLNG-based power plants in Punjab instead of coastal areas. While officials explained that these plants were established near major load centres, the Committee directed NEPRA to submit comprehensive tabulated details of all IPPs, tariff determinations, generation capacity, installation costs, and rate analyses. The Chairman of the Committee also emphasized the need to review electricity tariffs, renegotiate IPP agreements where necessary, and consider terminating contracts with unnecessary projects in order to reduce electricity prices for consumers. Questioning the Authority’s overall performance, the Committee observed that NEPRA had remained reluctant to undergo a performance audit by the Auditor General of Pakistan. The Committee unanimously called for accountability and directed that a comprehensive performance audit of NEPRA be conducted. It also decided to refer the matter of the unauthorized pay increase to the Public Accounts Committee (PAC) for detailed examination. The Committee also received a detailed briefing on the salaries, allowances, and benefits of the Chairman, Members, and senior officials of NEPRA. The Secretary, Cabinet Division, informed the Committee that NEPRA had enhanced the salaries and allowances of its Chairman and Members without obtaining the approval of the Federal Government, contrary to its own law. Members expressed serious concern over the unilateral increase, noting that although NEPRA had proposed revised market-based remuneration in 2018, the summary was still awaiting government approval. Taking notice of frequent changes in petroleum prices on a daily basis, the Committee decided to place the matter on the agenda of its next meeting for detailed discussion. The Committee also reviewed the implementation status of its recommendations regarding enhancement of the upper age limit and increase in the number of attempts for the CSS Competitive Examination. Expressing dissatisfaction over the lack of progress, the Chairman directed the Federal Public Service Commission (FPSC) and the Establishment Division to implement the Committee’s recommendations and submit a compliance report at the earliest. The Committee was scheduled to examine the Pakistan Telecommunication Authority’s (PTA) criteria for enforcing rollout obligations in the absence of a regulatory framework on the “Right of Way. ” However, deliberations were deferred due to the absence of the relevant officials. The Chairman of the Committee directed the Federal Minister for Information Technology, Secretary IT, Chairman PTA, a representative of the Law Division, and the Member (Legal) of the Ministry of IT to ensure their presence at the next meeting. The meeting was attended by Senators Mohammed Abdul Qadir and Aimal Wali Khan, while Senator Saleem Mandviwalla and Senator Amir Waliuddin Chishti participated virtually. Senator Shahadat Awan and Senator Saifullah Abro attended as movers of agenda items, whereas Senator Dr. Afnan Ullah Khan and Senator Dost Ali Jeesar attended as special invitees. Copyright Business Recorder, 2026

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