PESHAWAR: The Peshawar High Court on Tuesday sought detailed replies from the National Electric Power Regulatory Authority (Nepra) and ministry of energy (power division) to the petition of the Sarhad Chamber of Commerce and Industry (SCCI) for forensic audits of all power purchase agreements with independent power projects to prevent undue payments.

A bench consisting of Justice Sahibzada Asadullah and Justice Dr Khurshid Iqbal also directed other respondents in the petition including the Central Power Purchase Agency, Peshawar Electric Supply Company (Pesco) and five IPPs to file their comments before next date of hearing, which would be fixed later.

The SCCI, in its petition, sought the court directives for the government to implement in its letter and spirit recommendations of the special meeting of the Senate’s standing committee on power regarding excess profit paid to some IPPs.

The petitioner also opposed renewal and signing new agreements with IPPs stating that all those agreements that had come to an end or about to be concluded should not be renewed or re-awarded without a fair and transparent competitive process only on take-and-pay basis to avoid staggering capacity payments.

SCCI calls for action on Senate panel’s report about matter

Senior counsel Shumail Ahmad Butt appeared for the petitioner and pointed out that the ministry of energy (power division) had submitted its comments along with a report. He added that the comments neither comprehensively explained the circumstances nor had any detailed report been attached.

Deputy attorney general Bilal Ahmad Durrani appeared for the federal government, whereas advocate Mohammad Farooq Afridi appeared for the Nepra. They said that the comments had been submitted.

However, the bench observed that the comments were not sufficient to explain the circumstances. The bench directed the said two respondents to furnish better comments.

Mr Butt said that the Senate standing committee on power, in its meeting on May 15, 2019, had constituted a three members sub-committee, tasked with investigating reasons behind high electricity tariffs and financial implications of power generation costs, which included examining capacity payments to IPPs and their impact on consumer prices.

He said that the sub-committee discussed in detail elements of high tariff, capacity charges, payback period and financial calculations leading to higher profits.

The counsel said that the committee observed that some of the IPPs had enjoyed substantially higher ratios of profit than the rate of return allowed by the Nepra.

He contended that the Nepra tried to baselessly justify such a state of affairs claiming that the payments were made following international standards.

Mr Butt said that the committee was not satisfied with the Nepra’s explanation and asserted that those IPPs which had earned excessive profits due to misrepresenting or hiding any information from the regulator which had caused higher than allowed return, these IPPs should return the additionally earned illegal amount back to consumers of Pakistan.

He said that despite strong reservations, the said committee finally opined that the IPPs be given a fair chance to be heard by the Nepra, which afterward should determine a revised rate for all the IPPs after giving a full opportunity to all IPPs and all stakeholders to express their viewpoint and recover ill-gotten money from the companies and their initial sponsors as well as to initiate criminal proceedings against IPPs through an investigation agency along with asset confiscation.

The counsel said that the sub-committee presented a report to the standing committee on Nov 11, 2019, which unanimously adopted it and presented it as a special report before the house.

He argued that the said report had not been implemented by the government.

Mr Butt said that IPPs had been charging extra money for capacity payments involving several mechanisms and tactics as many IPPs had contracts that stipulated fixed capacity payments regardless of actual amount of electricity produced.

Published in Dawn, September 17th, 2025