The federal government has ordered an independent investigation into electricity purchases made by power distribution companies outside the national grid after concerns that some utilities bought expensive power in violation of the country’s economic merit order.
The move comes as public frustration grows over high electricity bills and continued loadshedding.
In an official statement, the government said certain distribution companies (Discos) had been purchasing electricity from small power producers and captive power plants through bilateral agreements at rates higher than the national tariff.
Authorities said these purchases were made outside the national grid system and without routing supply through the Independent System and Market Operator.
The government did not reveal the names of the companies involved or the volume of electricity purchased, stating that details are being withheld until the independent inquiry is completed.
Power Minister Awais Leghari reportedly took notice of the issue after it surfaced during a review exercise involving distribution companies and the Independent System and Market Operator.
He ordered the immediate suspension of off-merit electricity procurement and directed that all future purchases must comply with Nepra grid code, distribution code, and other regulatory requirements.
The minister also instructed authorities to coordinate with the market operator so that small power producers and captive plants are only included in dispatch decisions when they meet least-cost criteria under the economic merit order.
Following these directions, the Power Division said all distribution companies have been instructed not to buy electricity from small power producers without prior approval from the Independent System and Market Operator.
Officials added that electricity from such plants will only be purchased when it falls within the prevailing national merit order based on incremental generation cost under the approved mechanism.
