ISLAMABAD: Amid public outcry over expensive power and excessive loadshedding, the government on Wednesday announced that it had unearthed expensive power purchases by distribution companies (Discos) outside the national grid at exorbitant rates in violation of the economic merit order.

According to an official statement, the Discos were purchasing electricity from small power producers (SPPs) and captive power plants (CPPs) through bilateral contracts at higher rates than the national tariff, bypassing the national grid and the Independent System and Market Operator (ISMO).

It added that the names of the Discos and the quantum of power purchasing were not disclosed to allow an independent inquiry to take its course.

The statement said that Power Minister Awais Leghari took notice regarding the off-take of power from SPPs by Discos, exceeding the national merit order and ordered the initiation of an independent probe.

“The matter was revealed during the stock-taking of Discos and ISMO,” it said.

Per the statement, the power minister directed to discontinue the practice and bring it in accordance with the provisions of the National Electric Power Regulatory Authority’s (Nepra) grid code, distribution code and directions, immediately.

Leghari also directed to coordinate with ISMO for the inclusion of SPPs/CPPs to ensure the least cost for the consumer in the dispatch of power plants on the basis of economic merit order principles, it stated.

“In compliance with the power minister’s directions, the Power Division has issued instructions to all Discos to ensure that no off-merit procurement from SPPs shall be undertaken under any circumstances without obtaining prior explicit approval from ISMO,” the statement said.

The off-take of electricity from SPPs shall be strictly limited to cases where such power falls within the prevailing national merit order, determined on the basis of incremental cost of generation by following the prescribed mechanism, the Power Division said.