Govt exits electricity purchase system as first power wheeling auction begins

2 The federal government has launched Pakistan's first electricity wheeling auction under the Competitive Trading Bilateral Contract Market (CTBCM), with Energy Minister Sardar Awais Ahmad Khan Leghari announcing that the government will no longer purchase electricity under the existing centralised system. Speaking in a televised address in Islamabad on Sunday, Leghari said the government was effectively moving out of electricity purchases to allow power producers and consumers to transact directly. 'The government is practically exiting electricity purchases from today,' the minister said. The development follows the National Electric Power Regulatory Authority's (Nepra) approval of uniform Use of System Charges (UoSC) for open-access bulk electricity consumers, allowing eligible users to select their electricity suppliers. 400MW offered in first phase According to Leghari, 400 megawatts (MW) of electricity is being offered in the first phase of the wheeling auction, while the government plans to auction 800MW over the next five years. Under the new system, businesses and industries will be able to purchase electricity from power plants on a competitive basis. Leghari said consumers using more than one megawatt would initially be eligible to participate, with the system focused on industrial and other large consumers. 'Nobody will have the right to sell electricity to the government, nor will the government be able to purchase it,' he said. The minister said the electricity market would gradually develop, potentially allowing ordinary consumers to choose their electricity suppliers in the future. Nepra approves decade-long $47bn power expansion plan Govt seeks to change power purchasing model Leghari said the government would no longer purchase electricity and sell it to consumers at rates determined through the existing centralised mechanism. He said the availability of cheaper electricity could help Pakistani industries remain competitive in international markets and support exports. At present, the government purchases electricity through a centralised system before supplying it to consumers, according to the minister. He said questions had long been raised over the terms and conditions governing electricity purchases. Referring to independent power producers (IPPs), Leghari said their role had become controversial in public discourse over the years. Suppliers and consumers to transact directly In a separate post on X, Leghari said the government had implemented a commitment that previous administrations had pursued for decades. 'Suppliers and consumers of power can now transact with each other,' he said while sharing the public notice inviting requests for proposals for the 400MW wheeling auction. The power wheeling mechanism is intended to allow eligible consumers to purchase electricity from selected suppliers while using the existing transmission and distribution infrastructure to deliver the power. The first auction marks a shift towards a more competitive electricity market, initially covering industrial and other large consumers before any potential expansion to smaller users.