Senate Committee approves Captive Power Plants Levy Bill 2025

May 15, 2025 (MLN): The Senate Standing Committee on Finance has unanimously passed the Captive Power Plants Levy Bill 2025 during a session chaired by Senator Anusha Rehman.

Briefing the committee, Secretary Petroleum Momin Agha explained that the objective of the bill is to ease the burden of capacity payments and contribute to reducing electricity prices for the public.

He noted that a 5% levy was imposed immediately after the issuance of the ordinance. This rate will progressively rise to 10% in July 2025, 15% in February 2026, and 20% in August 2026.

Additional Secretary Finance shared that captive power plants were initially instructed to shut down, prompting companies to pursue legal action.

As a result, the government chose to implement a levy instead of enforcing closures, according to the press release.

He revealed that of the 5,500 industrial connections in the country, 1,100 are associated with captive power plants, and these facilities are currently billed at standard tariff rates.

Officials from the Petroleum Division informed the committee that the gas tariff for captive power plants has been consistently rising Rs2,750 per MMBTU in February 2024, Rs3,000 in June 2024, and Rs3,500 projected for February 2025.

During the meeting, Senator Mohsin Aziz voiced strong opposition to the bill, labeling it “anti-Pakistan” and warning it would result in industrial shutdowns.

He criticized the move as contradictory, given that industries were once encouraged to adopt captive power solutions during periods of national electricity shortages.

He described the bill as a potential "murder" of the industrial sector.

In response, Senator Anusha Rehman challenged Senator Aziz’s remarks, suggesting his stance implied resistance to affordable electricity. Senator Aziz rejected the accusation.

Senator Rehman later clarified that Senator Aziz, attending the session virtually, would not have his vote counted.

Senator Manzoor Kakar expressed full support for the legislation, describing it as “very good.”

Senator Rehman concurred, reiterating the Prime Minister’s commitment to reducing power costs.

With these discussions concluded, the committee unanimously approved the Captive Power Plants Levy Bill 2025.

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