The National Electric Power Regulatory Authority has withdrawn a massive Rs. 42 billion penalty against National Transmission and Dispatch Company. The decision reverses a policy that remained in place for over three years.
The penalty was originally imposed over alleged violations of economic merit order in power dispatch. However, NEPRA has now changed its stance after a fresh review.
The regulator stated that withholding funds from NTDC’s system charges was not aligned with the intended regulatory framework. It suggested that performance issues should be handled through monitoring and enforcement instead.
The case had earlier reached the Islamabad High Court, which paused the deductions and sent the matter back to NEPRA for reconsideration.
After reviewing the case, NEPRA admitted its earlier interpretation was too narrow. It said system reliability and grid stability must also be considered alongside cost efficiency.
The regulator acknowledged that deviations from economic dispatch may be necessary. In such cases, power companies may be entitled to compensation.
NTDC had argued that the deductions were hurting its financial position. It said the penalties were delaying important national transmission projects.
The authority has now ordered an end to withholding funds from NTDC. A separate mechanism will be introduced to release the withheld amount.
In a related update, NEPRA approved a fuel cost adjustment of about 10 paisa per unit. This will apply to electricity consumers across Pakistan, including those under K-Electric.
Experts say this decision could support power sector stability. It may also help speed up key infrastructure projects.