Power minister orders inquiry into out-of-merit electricity purchases by DISCOs

ISLAMABAD: Power Minister Awais Ahmad Leghari has ordered an inquiry into power distribution companies (DISCOs) for allegedly purchasing electricity from small producers in violation of the prescribed merit order, the Power Division said on Tuesday.

Leghari took “serious notice” of reports that some distribution companies were procuring electricity outside the regulatory framework, and directed them to immediately bring all power purchases in line with rules set by the National Electric Power Regulatory Authority.

He also instructed all distribution companies to coordinate with the Independent System and Market Operator to ensure strict implementation of the merit order — a system under which cheaper power plants are dispatched first to minimise generation costs.

“No distribution company will be allowed to violate the principle of running least-cost power plants first,” the minister said, according to the statement.

The Power Division directed that electricity procurement from small power producers should only take place if it meets the existing merit order criteria, adding that all relevant rules and regulations must be followed “in letter and spirit.”

Leghari further ordered immediate steps to ensure compliance across all distribution companies and warned that deviations from the merit order would not be tolerated.

The move comes as Pakistan continues efforts to reduce power generation costs and improve efficiency in its energy sector.