Despite claim of renaissance and mutual accolades by the professionals, bureaucrats and political leadership, the electricity sector continues to be marred and plagued by across-the-board criminal negligence in relation to generation, transmission, distribution and regulation activities.
Wrong approach and methodologies have been adopted as a panacea for the profound inefficiencies, irregulates and lacklustre performances.
The circulate debt, which is an official recognition of theft and willful leakages, has been swapped with debt to be financed by a particular charge included in the bills of the electricity consumers. Hence, the electricity consumers are paying twice against consumed electricity, and consumers are exposed to double jeopardy.
The inefficiencies and corruption of the public sector entities are financed by the consumers; notwithstanding, the circular debt continues to accumulate due to lower than targeted/permitted recoveries.
Another panacea relied by the mandarins of power is introduction of competitive electricity market. An ordinary student of economics would tell that for market to function there shall be adequate number of sellers and buyers, complete disclosure of information, absence of price distortions, etc.
Yet all these fundamentals are missing as the buyers are primarily public sector entities, information is discreet and pricing is hugely distorted, including but not limited to subsidies and uniform pricing of electricity distributed and supplied.
Any competitive market built on such skewed fundamentals is bound to fall and fail. After spending millions of rupees and undertaking foreign trips, the power experts have come up with a novel idea of introducing competition not in the capacity or energy markets, at the generation or distribution, but in the transmission and wheeling of electricity.
The transmission / wheeling charges determined by the regulator is an ideal case of regulatory capture where wheeling of electricity on business to business or pure commercial basis is hindered, prevented or discouraged through high pricing due to cross subsidies, stranded charges arising out of bad public policy decisions, which the private sector is required to bear while the Competition Commission of Pakistan is erringly silent over high barriers erected to the market entrants.
The electricity market competition is limited to and through transmission/wheeling and the pricing methodology with no cap on ceiling price or floor price is anti-competitive.
The evaluation criterion is based on quantum acquisition, which is negation of the public procurement regulatory authority rules and regulations, as well as the transparency. This practice and criteria were deprecated and set aside by the Supreme Court of Pakistan in rental power projects reported as 2012 SCMR 773.
After full circle and a decade, the said judiciary-declared flawed quantum-based criterion is back in business. Instead of focusing on demand related initiatives to absorb the surplus capacity, curtailing high ratio of theft and aggregate technical and commercial losses, the regulator is on song to allow increases in the tariff, which have become unsustainable and unpayable.
The result is paying consumers shifting to roof top solar solutions in record numbers at one end and there is increase in theft at the other end. Resultantly, the tariff is highest in the region that adversely affects the industrial consumers whose products have become uncompetitive while a decline in exports is witnessed.
To implement the electricity market, half a dozen public sector entities, with fat pay packages, have been established and licensed, increasing the burden on the consumers without any benefit accruing to them.
In many cases, their functions are overlapping and duplicate, causing waste of public monies without any accountability. At the same time, the provinces have been kept out of the electricity market and its functioning. Although pre- and post-18thAmendment to the Constitution of Pakistan, 1973 (Constitution), the Provinces are autonomous in the generation, transmission, distribution and regulation of the electricity, the federal entities are not willing to cede space to the provincial entities.
The constitutional forum of Council of Common Interests (CCI) is hardly convened to formulate policies in relation to the subject of electricity with the consultation of Provinces. Substantive measures are undertaken through plans driven by the Federal Government that intrude those into provincial domain.
In rest of the world, the wholesale business of electricity is undertaken at the federal level whereas retail business of electricity is regulated at the provincial level. However, despite being a Federation and Constitution being diarchial, the subject of electricity, including but not limited to generation, transmission, distribution and regulation, is substantially owned and controlled by the Federal Government. Most of the public sector entities are functioning beyond the constitutional mandate.
Now, reportedly, the task of formulating ‘National Electricity Policy’ is assigned to Power Planning and Monitoring Company (PPMC), which is in derogation of Article 154 of the Constitution as the CCI is the competent forum for formulation of electricity policy, in consultation with the Provinces.
Further, PPMC is an incorporated company under the Companies Act, 2017, which cannot exercise sovereign executive powers for and on behalf of the Federal Government.
Unless and until a fundamental revamping of institutional structures, policies and legal aspects is not undertaken, the electricity consumers shall continue to suffer through high pricing, interruptible supply of electricity, inefficiency and high cost of overheads.
Copyright Business Recorder, 2026
The writer is a legal practitioner with standing and experience in regulatory, power, commercial and corporate sectors
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