Islamabad :The federal government has decided to launch a new electricity market system aimed at reforming the purchase and sale of electricity. The new framework is set to be implemented later this year, according to the Secretary of Power Division, who briefed the Senate Standing Committee on Power during a meeting chaired by Senator Mohsin Aziz.
The Secretary explained that the current system, where the Central Power Purchasing Agency (CPPA) buys electricity and sells it to distribution companies (DISCOs), has led to inefficiencies. To address these issues, the government plans to merge the National Transmission and Despatch Company (NTDC) and CPPA into a new regulatory body, the Independent System and Market Operator (ISMO). This body will oversee the market as part of broader power sector reforms.
The Secretary further revealed that the government aims to privatize state-run generation (GENCOs) and distribution companies (DISCOs). Additionally, the NTDC will be split into three entities, with a subsidiary focusing on energy infrastructure.
Senator Shibli Faraz raised concerns about NTDC’s long-standing lack of a permanent head, which he attributed to poor planning and execution. He questioned whether the proposed measures would yield meaningful improvements. Senator Mohsin Aziz echoed similar concerns, pointing out that creating new institutions without ensuring merit-based appointments often fails to deliver results.
The committee was informed that Dr. Fayyaz Chaudhry has been appointed as Chairman of the NTDC Board, which has been tasked with submitting reform recommendations by March. The Secretary emphasized that future projects in the power sector will prioritize cost efficiency, with no additional costs passed onto consumers. Instead, federal and provincial governments will bear any excess expenses.
Senator Shibli Faraz called for expert opinions in the next briefing, expressing skepticism over the performance of officials previously removed from key roles. He also criticized high electricity tariffs, which he said are driving consumers toward solar energy and hindering exports due to elevated production costs.
Senator Manzoor Kakar highlighted the deteriorating state of the power system and urged for a clear policy to address the growing reliance on solar energy. In response, the Secretary assured the committee that efforts are underway to identify and resolve systemic issues, with the goal of significantly reducing electricity tariffs by June this year.
The committee underscored the need for concrete measures to support industries and boost exports while ensuring affordability and sustainability in the energy sector.
