The Senate Standing Committee on Cabinet Secretariat on Tuesday raised serious concerns over billions of rupees in capacity payments to non-operational Independent Power Producers (IPPs), calling the payments an unnecessary burden on electricity consumers.
The committee, which met under the chairmanship of Senator Rana Mahmood Ul Hassan, unanimously called for accountability at NEPRA and decided to refer the matter of unauthorised increases in the salaries and allowances of its chairman and members to the Public Accounts Committee (PAC) for detailed examination.
During a briefing on circular debt and capacity payments to IPPs, committee members questioned why consumers were being charged substantial capacity payments for power plants that were not operational. They called for greater scrutiny of IPP agreements and tariff structures to reduce the burden on electricity consumers.
The committee also criticised NEPRA for failing to provide details of tariff determinations despite repeated directions and directed the regulator to submit comprehensive tabulated information on all IPPs.
The required details include:
- Tariff determinations of all IPPs
- Generation capacity
- Installation costs
- Rate analyses
- Details of capacity payments
The committee also discussed the installation of imported coal- and RLNG-based power plants in Punjab instead of coastal areas. Officials explained that the plants had been established near major load centres.
Senator Rana Mahmood Ul Hassan stressed the need to review electricity tariffs and renegotiate IPP agreements where necessary. He also called for consideration of terminating contracts involving unnecessary projects to help reduce electricity prices for consumers.
The committee questioned NEPRA’s reluctance to undergo a performance audit by the Auditor General of Pakistan and unanimously directed that a comprehensive performance audit of the regulator be conducted.
The committee also raised concerns over NEPRA’s alleged failure to adequately protect the government’s solar energy policy, observing that certain IPPs had, prima facie, played a role in undermining the policy.
The issue of NEPRA’s salaries and allowances was also taken up during the meeting. Secretary, Cabinet Division, informed the committee that NEPRA had increased the salaries and allowances of its chairman and members without obtaining approval from the Federal Government, contrary to the provisions of its own law.
Members expressed concern over the unilateral increase and decided to refer the matter to the PAC for detailed examination. They noted that although NEPRA had proposed revised market-based remuneration in 2018, the summary was still awaiting government approval.
The committee also discussed telecommunications regulation, circular debt and implementation of its recommendations regarding the upper age limit and number of attempts for the CSS Competitive Examination.
