ISLAMABAD: Federal Minister for Power Awais Ahmad Khan Leghari announced that the government is actively pursuing measures to cut electricity tariffs by Rs10 to Rs12 per unit. Addressing the National Assembly’s Standing Committee on Power, chaired by Muhammad Idrees, the minister outlined comprehensive strategies targeting high energy costs.
Leghari emphasized that renegotiated Power Purchase Agreements (PPAs) with independent power producers (IPPs) had already secured savings of Rs1.1 trillion, contributing to a Rs4 per unit reduction for domestic consumers. The government plans further reviews of agreements with both private and government-owned generators to achieve additional savings.
K-Electric’s multi-year tariff request, proposing an increase of Rs10.5 per unit to generate Rs500 billion in profits over five to seven years, was rejected. Leghari reiterated the government’s priority to protect public interest from unfair electricity rate hikes.
During the meeting, lawmakers voiced frustration over capacity payments of Rs2 trillion annually, accounting for 75% of total electricity costs. Malik Anwar Taj proposed utilizing unused electricity from IPPs to relieve consumers. Leghari acknowledged the burden but pointed to ongoing reforms in power distribution companies (Discos), including board changes in eight firms, yielding significant savings.
Efforts to curb electricity theft in high-loss regions, particularly in Khyber Pakhtunkhwa (KP), faced resistance. Leghari noted that despite multiple engagements with KP’s leadership, progress in reducing illegal connections remained insufficient, costing the government Rs6 billion in additional losses.
Leghari highlighted broader energy sector reforms, including plans for a March 2025 electricity market launch, where prices will reflect market dynamics. Solar energy expansion through off-grid solutions and net metering is expected to add 10,000 to 12,000 MW. He also warned that 17,000 MW of hydropower projects could be at risk if tariff reductions are not implemented.
The minister concluded by promising continued efforts to reduce consumer electricity bills, reviewing taxes within tariffs, and modernizing the transmission and distribution infrastructure.
