ISMO seeks amendments to power auction process framework

ISLAMABAD: The Independent System Market Operator of Pakistan (ISMO) has proposed amendments to the existing electricity auction process framework and formally approached the National Electric Power Regulatory Authority (Nepra) for necessary approval, aimed at improving transparency, efficiency and investor confidence in the power sector.

The ISMO proposed that the auction participants intending to participate through solar and wind generation technologies be required to co-locate with their generation facilities, a Battery Energy Storage System (BESS) with a minimum 10 percent firm capacity.

According to the ISMO, the proposal is being made not only to address grid challenges, including curtailment and duck curve, but also to benefit the auction participants as it improves their returns.

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Under the approved process, the proposal submission timeline is fixed as one month, and there is no flexibility to extend the proposal submission timelines.

In another proposed amendment, the ISMO has suggested that, upon request by prospective auction participants, the entity may be enabled to grant an extension up to one month in the proposal submission deadline.

The ISMO has also proposed the constitution of a Grievance Redressal Committee, comprising two independent members of the ISMO Board and the CEO of ISMO for redressal of grievances raised by auction participants.

According to an official communication, the proposed changes have been shared with the regulator for consideration, as part of ongoing efforts to streamline competitive procurement mechanisms in the electricity market.

The letter highlighted the need to refine certain procedural and structural aspects of the auction process to align it with evolving market dynamics and regulatory requirements. The officials believed that the revised mechanism will facilitate better participation from stakeholders and ensure more competitive bidding outcomes.

The ISMO has requested the Nepra to review the proposed amendments on a priority basis and provide regulatory guidance to enable timely implementation. The regulator’s response will be crucial in determining the future course of the revised auction framework.

The Regulator has sought comments from all stakeholders, interested parties, and the general public in written form within a week starting from July 13, 2026.

The Nepra is expected to commence a public hearing after examining suggestions from the stakeholders and other parties before issuing its determination.

Copyright Business Recorder, 2026