UNSUSPECTING electricity consumers have once again been forced to pay an additional amount — Rs215m — not because of an unavoidable rise in power generation costs thanks to a global fuel price spike or currency depreciation or capacity payments or a combination of these factors, but on account of regulatory failures.
With the elements mentioned above routinely blamed for expensive electricity in the country, the failures of power sector regulators Nepra and the CPPA-G to effectively enforce regulation to protect consumer rights and financial interests have always escaped public scrutiny.
The latest episode, in which an international coal supplier invoked force majeure to cancel a long-term contract with the Sahiwal power plant last year, compelling the latter to buy fuel at higher prices, is a case in point.
Instead of penalising the defaulter through forfeiture of its performance guarantees to recover replacement costs for wrongly invoking the force majeure clause, Nepra and the CPPA-G decided to pass on the cost differential to power consumers in the form of a higher tariff. Not just that, the CPPA-G, rather than blacklisting the supplier, permitted it to continue the supply of coal under its long-term contract, and participate in and win a spot tender at a higher rate in June for the same power plant.
That the two regulators failed to act against the defaulting supplier, and instead, effectively rewarded it for reneging on its contractual obligations, underscores just how weak and compromised the power sector’s regulatory framework has become. This failure is particularly indefensible given that industry data flatly contradicts the supplier’s justification for invoking force majeure.
The firm had cited congestion at South Africa’s Richards Bay Coal Terminal and the flare-up with India in May this year as reasons for suspending deliveries. Yet, the record shows that other suppliers continued to meet their contractual commitments through the same terminal, while coal shipments to Pakistan from other traders remained uninterrupted. The real motive, it appears, was economic self-interest, with the supplier belatedly discovering that the agreed price discount was too steep for its comfort and thus choosing to walk away.
Unfortunately, this is not the first time electricity consumers have been made to bear the cost of regulatory rot through their inflated bills. Nor, sadly, should it come as a surprise.
The latest breach has only reaffirmed a familiar pattern where regulatory dysfunction seems to have been institutionalised. In Pakistan’s power sector, watchdogs too often become enablers and are complicit, whether by design or by neglect, in protecting private interests and defaulters rather than consumers. When regulators allow private entities to breach contracts without consequence, accountability becomes optional, losses become collective, and market failure the norm.
Published in Dawn, October 7th, 2025
