Govt plans to establish free electricity market, says Power Secretary

February 26, 2025 (MLN): The government is working towards establishing a free electricity market, allowing consumers to choose their electricity provider.

This was stated by Fakhre Alam Irfan, Secretary of the Power Division, during a meeting of the National Assembly’s Energy Committee.

Additionally, efforts are underway to enable consumers to take their own meter readings and report them via mobile apps, which are currently under development for all DISCOS, according to the press release issued today.

The secretary also disclosed that discussions are ongoing with the IMF to reduce taxes on electricity bills, highlighting that FBR collects Rs800-900 billion in taxes from these bills.

To promote renewable energy, the government is exploring interest-free loans to shift tube wells to solar power.

Meanwhile, efforts to modernize electricity infrastructure continue, with 800,000 meters already replaced in Islamabad, and an additional 1.2 million meters set to be upgraded to smart meters.

The meeting convened to discuss measures to reduce electricity theft and losses across the country. 

The secretary emphasized the need for competition in the power sector to ensure better service and accountability.

During the meeting, Malik Anwar Taj inquired whether there was a plan to move electricity underground to tackle these issues.

He pointed out that Islamabad has underground electricity, which results in lower theft and losses.

However, the Secretary Power Division stated that underground electricity was not a complete solution, citing Faisalabad as an example where theft and losses remain low despite overhead electricity lines.

The Secretary further revealed that LESCO incurred losses of Rs82bn last year.

In response, Rana Muhammad Hayat questioned how such significant losses occurred when LESCO shut down feeders for up to 20 hours.

Discussing privatization, Syed Mustafa Kamal argued that merely privatizing power companies would not resolve the issue unless monopolies were eliminated.

He pointed out that K-Electric, despite being privatized, still holds a monopoly, forcing Karachi residents to purchase electricity solely from the company.

Mustafa Kamal questioned why relief from Independent Power Producers (IPP) agreements has not been provided yet.

In response, the Power Secretary stated that only two months have passed, and relief will start coming soon.

Addressing concerns about pressure on IPPs, the Power Secretary clarified that all IPPs had been called for discussions.

He revealed that violations of agreements by IPPs were identified and communicated to them.

The IPPs were given the option to resolve issues through negotiations or face a forensic audit.

The Power Secretary further stated that one or two IPPs proposed resolving the matter through arbitration in a London court.

However, the government did not agree to take the case to arbitration. He emphasized that there was no pressure during negotiations with IPPs.

Meanwhile, the Minister for Power is set to meet the British High Commissioner today to discuss the issue.

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