Setting up of NEP endorsed: PM approves wheeling charges auction guidelines

ISLAMABAD: Prime Minister Shehbaz Sharif on Wednesday granted in-principle approval to the framework guidelines for the auction of wheeling charges, marking a significant step in the government’s efforts to develop a competitive energy market.

According to the Minister for Power, Awais Leghari, following the approval of the electricity wheeling charges, an initial 200MW of electricity will be auctioned in February next year under the Competitive Trading Bilateral Contract Market (CTBCM). The government has already approved wheeling charges of Rs 12.55 per kilowatt-hour under the CTBCM.

The decision, announced following a high-level review meeting chaired by the prime minister, underscores the government’s commitment to energy reforms aimed at improving efficiency and reducing costs, with the meeting focusing on recommendations by the cabinet subcommittee on energy.

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In addition to approving the wheeling charges auction framework, the prime minister also endorsed the creation of a comprehensive National Energy Plan (NEP), which will be developed through consultations with federal ministries and provincial governments.

A statement from the Prime Minister’s Office outlined the government’s approach to ensure a collaborative strategy in the formulation and execution of the NEP.

The plan will prioritise providing electricity to industries at competitive rates while improving access and affordability for domestic consumers.

To ensure effective implementation, the prime minister directed relevant ministries and provincial authorities to present practical strategies for the NEP, addressing the diverse needs of the country’s power sector.

He also authorised the establishment of a secretariat within the Power Division to oversee the execution of the plan, streamlining policy development and planning.

He further instructed that the national electricity transmission infrastructure be enhanced, and the privatisation of distribution companies (Discos) expedited. These reforms are expected to boost industrial output and reduce electricity costs for consumers.

The meeting also stressed the need to integrate recommendations from the Ministry of Climate Change, the Ministry of Finance, the Ministry of Industrial Production, and the Ministry of Petroleum into the NEP.

The prime minister highlighted the positive impact of recent reforms to the electricity transmission system, which have already delivered improvements for both industrial and domestic consumers. In a significant policy shift, the cabinet committee on energy decided to streamline energy planning across the country, moving away from the fragmented approach where federal and provincial bodies managed energy planning independently.

The new integrated model will align production capacities, consumption patterns, and energy needs at both levels of government. To support this initiative, a secretariat will be established under the Power Planning & Monitoring Company (PPMC), which will serve as the central hub for energy policy formulation.

Copyright Business Recorder, 2025