‘No third-party validation’: Nepra’s nod sought for USD53bn ISP 2025-35

ISLAMABAD: The government on Wednesday sought National Electric Power Regulatory Authority’s approval for the Integrated System Plan (ISP) 2025-35, estimated at over USD53 billion, without third-party validation, amid concerns of a potential increase of around Rs4 per unit in electricity prices and criticism from industry stakeholders.

The public hearing was presided over by NEPRA Chairman Waseem Mukhtar, along with Member (Tariff & Finance) Amina Ahmed and Member (Development) Maqsood Anwar Khan. Notably, there was no representation from Sindh and Balochistan.

Umar Farooq of the Independent System and Market Operator (ISMO) and Naveed Qaiser presented the plan and responded to queries raised by the Authority, particularly by Amina Ahmed and Maqsood Anwar Khan.

READ MORE: ISMO, Nepra at odds over Integrated System Plan issues

The ISP 2025-35 comprises Indicative Generation Capacity Expansion Plan (IGCEP) 2025-35 and the Transmission System Expansion Plan (TSEP) 2024-34.

Its stated objectives include affordability, reliability, security, and sustainability. The plan is based on an assumed electricity demand growth of 2.6 percent over the period.

The plan has been developed using demand projections based on served demand under a low, business-as-usual scenario. A project is classified as “committed” if it has achieved at least 10 percent physical and financial progress, has an approved PC-1 with secured funding in the public sector, or has reached financial close in the private sector. The Diamer Bhasha hydropower project has been included as a strategic initiative.

The plan follows a Least-Cost, Least-Violation (LCLV) criterion, incorporates transmission interconnection costs into project capital costs, and assumes an additional net-metering capacity of around 9,000 MW. Key assumptions include the addition of 3,000 MW of market-based renewable energy against a demand of 800 MW. Certain power plants located near load centers have been designated as “must-run” during summer months until 2027-28 due to transmission constraints.

Contractual minimum dispatch obligations have also been retained for several plants, including 50 percent dispatch for Uch-II, Engro, and Foundation (low Btu gas-based), 50 percent for RLNG-based Bhikki, Balloki, and Haveli Bahadur Shah plants until March 2032, and 75 percent for BQPS-III until December 2025. Similarly, minimum dispatch levels of 75 percent and 50 percent have been assumed for SNPC-I and SNPC-II, respectively.

According to officials, the power purchase price (PPP) is projected to increase to Rs37.28 per kWh from the current level of Rs25 per kWh. However, they maintained that the net impact on consumers would be limited to around Rs4 per unit.

Industry representatives, however, expressed serious concerns. Rehan Javed from Karachi warned that with new costly additions under the IGCEP 2025-35, electricity prices could rise to as high as Rs70 per unit, excluding taxes and surcharges, potentially leading to industrial collapse. He urged the government to prioritize least-cost projects to keep tariffs affordable and retain consumers on the grid.

Member (Tariff & Finance) Amina Ahmed questioned the exclusion of certain projects previously classified as committed or optimized under IGCEP 2021, seeking clarity on the criteria used to drop them.

In response, Naveed Qaiser stated that some projects failed to meet the required conditions to remain in the committed category. He also acknowledged that the Transmission System Expansion Plan (TSEP) does not fully align with Discos’ requirements, as some projects were excluded, but assured that these gaps would be addressed in the next update expected in the coming months.

Qaiser further informed that projects totaling 17,485 MW were selected from an initial pool of around 26,000 MW after extensive deliberations across 62 meetings, including 30 chaired by the Minister for Power.

He claimed that this will result in savings of Rs 300 to 400 billion annually for next 10 years.

Responding to another query, he said electricity supply to K-Electric from the national grid would be increased to 3,000 MW by 2028 through new transmission infrastructure, while acknowledging that transmission projects often face delays.

He added that only the cost of the power generation component of the Diamer Bhasha Dam would be recovered through tariffs, while the reservoir component would be financed through the Public Sector Development Programme (PSDP).

Copyright Business Recorder, 2026