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       ISLAMABAD: Power Minister Sardar Awais Leghari on Monday announced a significant cut in wheeling charges to promote a competitive electricity market, while warning that including two stalled Khyber Pakhtunkhwa (KP) hydropower projects in the national capacity plan could raise the base tariff by Rs6 per unit by 2034.

       Testifying before the Senate Standing Committee on Power, chaired by Senator Mohsin Aziz, the minister said wheeling charges had been reduced by over 55pc — from Rs27 to Rs12 per unit — following cabinet approval. The revised rates are now with Nepra for final clearance.

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       The committee discussed the exclusion of the 207MW Madyan and 88MW Gabral hydropower projects from the Indicative Generation Capacity Expansion Plan (IGCEP). KP’s Special Assistant on Energy, Tariq Sadozai, said land worth Rs5bn had been acquired and physical progress made under earlier CCI decisions.

       Mr Leghari responded that the selective interpretation of CCI-approved policies was misleading. He warned that adding the projects could inflate electricity prices significantly. He said the government had removed 8,000–10,000MW of high-cost projects, including some under CPEC, to prevent future tariff hikes. The IGCEP, he added, is revised annually based on demand, economic trends, and investment viability.

       Leghari warns inclusion of KP’s stalled hydro projects could push tariffs up by Rs6 per unit by 2034

       Highlighting broader reforms, the minister said the government had cancelled agreements with five independent power producers (IPPs) and renegotiated others, securing an estimated Rs3.4tr in savings over the next 4-5 years. Distribution company (Disco) losses had also been cut by Rs191bn in FY25 so far.

       He said the shift toward a competitive power market had freed the government from compulsory power purchases and that industrial power tariffs had declined by 30-35pc compared to June 2024. He acknowledged that electricity theft remained a persistent challenge, requiring multi-pronged action.

       The committee also discussed captive power plants, imported coal and LNG projects, and subsidy policy for protected consumer categories. Senator Aziz urged a review of the protected category structure and suggested introducing multiple tariff slabs to cushion low-income users. The power secretary confirmed that reassessments were underway and that subsidies continued for users consuming up to 200 units.

       On the issue of Net Hydel Profit (NHP), KP officials claimed that current payments were inadequate and accumulating. Nepra officials maintained that payments were ongoing. The committee recommended clearing the backlog and proposed monthly disbursements of at least Rs5bn to KP. A follow-up meeting was requested within a week.

       Senator Aziz also questioned the high return on investment (ROI) for certain IPPs, citing cases where ROI exceeded 100pc. Nepra officials attributed this to dollar-based returns. The committee asked Nepra to present the last five years of audited balance sheets for these IPPs in the next meeting.

       The committee called for greater cooperation between federal and provincial governments to ensure viable projects are included in IGCEP and consumer interests are safeguarded.

       Published in Dawn, August 12th, 2025