ISLAMABAD: The Senate Standing Committee on Cabinet Secretariat has voiced serious concern over billions of rupees in capacity payments being made to non-operational Independent Power Producers (IPPs), describing the practice as an unnecessary financial burden on electricity consumers.
During a meeting chaired by Senator Rana Mahmood Ul Hassan on Tuesday, the committee also criticized the National Electric Power Regulatory Authority (NEPRA) and certain IPPs for allegedly undermining the government’s solar energy policy. Members unanimously called for greater accountability, directed a comprehensive performance audit of NEPRA, and decided to refer the issue of unauthorized salary increases for the regulator’s Chairman and members to the Public Accounts Committee (PAC) for further scrutiny.
The committee reviewed key issues including circular debt, IPP capacity payments, NEPRA’s performance, telecommunications regulation, and the implementation of recommendations regarding the upper age limit and number of attempts for the CSS Competitive Examination.
Concerns Over Capacity Payments and Solar Policy
During a briefing on circular debt and power sector finances, committee members questioned the continued payment of capacity charges to power plants that are not operational. They termed the payments an avoidable burden that ultimately increases electricity costs for consumers.
The committee also criticized NEPRA for failing to provide tariff determination details despite repeated directives and observed that some IPPs had, prima facie, contributed to undermining the government’s renewable energy and solar power policy.
Members further discussed the installation of imported coal- and RLNG-based power plants in Punjab rather than coastal regions. While officials explained that the plants were located near major electricity demand centers, the committee directed NEPRA to submit detailed information on all IPPs, including tariff determinations, installed generation capacity, project costs, and rate analyses.
Committee Chairman Senator Rana Mahmood Ul Hassan emphasized the need to review electricity tariffs, renegotiate IPP agreements where necessary, and consider terminating contracts for unnecessary projects to help reduce electricity prices.
NEPRA Under Scrutiny
Questioning NEPRA’s overall performance, the committee noted that the regulator had been reluctant to undergo a performance audit by the Auditor General of Pakistan. Members unanimously directed that a comprehensive audit be conducted.
The committee also received a detailed briefing on the salaries, allowances, and benefits of NEPRA’s Chairman, members, and senior officials.
The Secretary of the Cabinet Division informed members that NEPRA had increased the salaries and allowances of its Chairman and members without obtaining mandatory approval from the federal government, in violation of its governing law.
Committee members expressed concern over the unilateral decision, noting that although NEPRA had proposed revised market-based remuneration in 2018, the proposal remains pending government approval. The issue has now been referred to the Public Accounts Committee for detailed examination.
Petroleum Prices and CSS Reforms
Taking notice of frequent changes in petroleum prices, the committee decided to include the matter on the agenda of its next meeting for detailed discussion.
The committee also reviewed progress on its recommendations to increase the upper age limit and the number of attempts for the CSS Competitive Examination. Expressing dissatisfaction over the lack of implementation, the chairman directed the Federal Public Service Commission (FPSC) and the Establishment Division to implement the recommendations and submit a compliance report at the earliest.
PTA Discussion Deferred
The committee was also scheduled to review the Pakistan Telecommunication Authority’s (PTA) criteria for enforcing telecom rollout obligations in the absence of a regulatory framework on the “Right of Way.” However, the discussion was postponed due to the absence of relevant officials.
The chairman directed the Federal Minister for Information Technology, Secretary IT, Chairman PTA, representatives of the Law Division, and the Ministry of IT’s Member (Legal) to ensure their attendance at the next meeting.
The meeting was attended by Senators Mohammed Abdul Qadir and Aimal Wali Khan, while Senators Saleem Mandviwalla and Amir Waliuddin Chishti participated virtually. Senators Shahadat Awan and Saifullah Abro attended as movers of agenda items, with Senators Dr. Afnan Ullah Khan and Dost Ali Jeesar participating as special invitees.
Story by Naveed Butt
