Govt expects major electricity tariff cut for industry, households by June

A significant reduction in electricity tariffs for industrial and domestic consumers is expected by June 2025, according to Secretary Power Division Dr. Fakhre Alam Irfan. The announcement came during a Senate Standing Committee on Power meeting, where officials discussed savings from revised or terminated contracts with Independent Power Producers (IPPs).

According to media reports, Dr. Irfan stated that the government has assessed the impact of net-metering and off-grid consumers and is taking various steps to lower tariffs. He added that a major restructuring of the power sector is underway, including the separation of energy purchase responsibilities from the Central Power Purchasing Agency-Guaranteed (CPPA-G) and the introduction of a new market operation system.

Senator Mohsin Aziz noted that the government is effectively dividing the current mandate of the National Transmission and Dispatch Company (NTDC), requiring new hiring for emerging entities. 

The Power Division secretary explained that a new organization, the Independent System Market Operator (ISMO), has been established. ISMO will oversee system operations by merging the market operation functions of CPPA-G with the National Power Control Centre (NPCC) under NTDC.

Dr. Irfan assured that the restructuring plan is well-planned to prevent disruptions among NTDC employees, with their job security intact. He emphasized that lessons from WAPDA’s unbundling have been incorporated into this process, aligning it with international best practices.

Senator Syed Shibli Faraz highlighted concerns over NTDC’s long-standing leadership vacuum, questioning how the organization could function effectively without a full-time head. He stressed the importance of transmission planning alongside power plant installations to manage capacity payments efficiently.

The committee discussed whether the restructuring would enhance energy sector efficiency or create further complications. While the secretary clarified that ISMO would act as a market facilitator rather than an energy purchaser, committee members stressed the need for strategic planning within the ministry to assess the long-term impact of new projects.