ISP 2025-35: Further blow to ‘reeling’ industries plus tariff hike looming: FPCCI

ISLAMABAD: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has rejected the proposed Integrated System Plan (ISP) 2025-35, jointly tailored by the Independent System and Market Operator (ISMO) and Power Planning and Monitoring Company (PPMC) as it will increase electricity tariff and severely affect the already reeling industries.

The Federation of Pakistan Chambers of Commerce & Industry (FPCCI), through its Energy Advisory Committee has submitted written comments in response to NEPRA’s public hearing on the Integrated System Plan (ISP) 2025-35, comprising IGCEP 2025-35 and TSEP 2025-35, held on May 20, 2026.

Chief Financial Officer (CEO) of PPMC, Naveed Qaiser, during the hearing requested the Authority to approve the ISP 2025-35 as is so that implementation on the plan may be started as early as possible.

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

According to the post public hearing comments, the FPCCI formally and strongly objected to the approval of ISP 2025-35 in its current form, stating that its written comments set out, on the regulatory record, six principal grounds for this objection as follows: (i) the PLEXOS costing methodology underlying IGCEP 2025-35 is fundamentally flawed-suffering from wrong assumptions, pre-committed project bias with cost-optimisation disabled, and incomplete costing that excludes USD10.6 billion of TSEP transmission costs; (ii) least cost’ does not mean affordable. No one in this process has asked whether Rs.49/unit - the cheapest option in a flawed model - is affordable for Pakistan’s electricity consumers. NEPRA must impose affordability as a binding constraint; (iii) after committing USD 57+ billion in generation and transmission investment, ISP 2025-35 does not guarantee and does not project - that the consumer tariff will remain at or below the current 12 cents (Rs.33.38/kWh). If it cannot, the plan fails its own stated purpose; (iv) WAPDA projects are structured as 100% pass-through obligations with no cap on cost overruns. The Neelum Jhelum Hydropower Project’s precedent and WAPDA’s own current tariff petition before this Authority confirms that consumers ultimately bear every rupee of overrun. This model is unsustainable for new commitments of USD 10.5+ billion; (v) all committed public-sector projects (Diamer Bhasha, Dasu, Mohmand, Tarbela Extension-5, CASA-1000, and C-5 Nuclear) must be declared ‘strategic’ under the National Electricity Policy 2021 and funded through PSDP/Federal Budget-not through consumer electricity bills; and (vi) industrial demand ‘growth’ cited in IGCEP is fuel switching, not new economic activity.

The FPCCI contends that its own monthly data shows total industrial energy (grid + captive gas) declined 9% even as grid consumption rose. The GDP-to-electricity correlation model is broken and invalid as a planning basis.

The FPCCI urged NEPRA to reject ISP 2025-35 in its entirety and return it to ISMO with a direction to resubmit a plan that: (i) uses correct demand projections; (ii) publishes year-wise PKR tariff projections for all scenarios; (iii) imposes a binding CPP cap of 25% of consumer end tariff; and (iv) funds all committed strategic projects through PSDP rather than consumers bills.

At a recent meeting of Central Development Working Party (CDWP) Minister for Planning, Development and Special Initiatives, Ahsan Iqbal grilled the top brass of Ministry of Water Resources and WAPDA for cost overruns of hydropower projects which are being financed through the Public Sector Development Plan (PSDP).

Copyright Business Recorder, 2026