The government confirmed distribution companies purchased electricity outside the national grid at higher rates, violating the economic merit order and regulatory provisions.
An official statement said Discos procured power from small producers and captive plants through bilateral contracts, bypassing the national tariff, grid system, and Independent System Operator.
Names of the companies and quantum of power purchased were withheld to allow an independent inquiry, initiated following directions from Power Minister Awais Leghari.
The minister ordered discontinuation of off‑grid purchases, directing compliance with Nepra’s grid code, distribution code, and instructions, ensuring procurement strictly follows national merit order principles.
Leghari instructed coordination with ISMO for inclusion of small and captive producers, ensuring least‑cost electricity dispatch for consumers under economic merit order guidelines.
The Power Division issued instructions to all distribution companies prohibiting off‑merit procurement from small producers without prior explicit approval from the Independent System Operator.
Electricity off‑take from small producers will only be permitted when generation costs fall within the prevailing national merit order, determined through prescribed incremental cost mechanisms.
