Written by: Rana Farooq Ashraf : Published by ANI News Agency
Pakistan’s power crisis is no longer merely a question of load-shedding, expensive electricity bills, or rising tariffs. The deeper crisis lies in the structure of the power sector itself—its contracts, planning, capacity payments, and the enormous financial burden ultimately passed on to ordinary consumers.
Recent figures regarding payments to Independent Power Producers (IPPs) have once again raised a fundamental question: Is Pakistan paying only for the electricity it actually consumes, or is it also paying heavily for power-generation capacity that remains underutilized?
Between July 2025 and May 2026, billions of rupees were paid to private power producers. A substantial portion of these payments related not simply to electricity actually generated but to capacity commitments under existing agreements. This has triggered public debate and renewed scrutiny of Pakistan’s power-sector model.
Capacity payments are not, by themselves, evidence of wrongdoing. Under certain power-purchase agreements, producers are entitled to payments for maintaining available generation capacity, even when that capacity is not fully utilized. From a contractual perspective, such arrangements may be legitimate. But from the perspective of the national economy, a much bigger question must be asked:
Were these contracts designed according to Pakistan’s actual long-term electricity demand, and do they still make economic sense today?
This question deserves serious attention because Pakistan has experienced a fundamental mismatch between installed generation capacity and actual electricity demand. When consumers cannot afford expensive electricity, industrial activity slows, and power plants operate below their potential, the country can find itself paying for capacity that it cannot economically utilize.
The National Electric Power Regulatory Authority’s own assessments have highlighted the significant role of capacity-related costs in the overall power-purchase structure. Excess generation capacity and low plant utilization have emerged as important factors contributing to the rising cost of electricity.
This leads to another unavoidable question:
If the country does not need or cannot afford to utilize its entire installed capacity, why were such large capacity commitments made in the first place?
And if those decisions were reasonable when the contracts were signed, should the state not periodically reassess them in light of today’s economic realities?
This is not a question that belongs to one political party, one government, or one institution. It concerns every Pakistani who receives an electricity bill at the end of the month.
The electricity bill is no longer simply a payment for units consumed. It reflects a complicated chain of generation costs, capacity charges, taxes, surcharges, transmission and distribution losses, electricity theft, fuel costs, and the accumulated burden of the circular debt.
Therefore, the debate must move beyond political slogans.
The government should make the power sector substantially more transparent. Details of every major IPP agreement should be publicly accessible: the original investment, agreed tariff structure, capacity payments, actual electricity generation, plant utilization, fuel arrangements, dollar-linked components, and the total amount paid by the state over the life of each contract.
Only then can citizens determine where the problem lies.
There is, however, another side to this debate. It would be unfair to place the entire responsibility for Pakistan’s electricity crisis on IPPs. Electricity theft, transmission and distribution losses, poor recovery by distribution companies, expensive fuel, inefficient public-sector power entities, and weak planning have also contributed significantly to the crisis.
Pakistan therefore needs a complete reform of the energy sector rather than another temporary increase in electricity tariffs.
Investment must be protected, legitimate contractual obligations must be respected, and the rights of consumers must be safeguarded. But no system can remain sustainable if its financial structure continuously transfers inefficiencies to ordinary citizens.
If payments to power producers have been made under valid contracts, the government should have no reason to hide those contracts from the public. If certain agreements have become economically damaging, they should be renegotiated wherever legally possible. If evidence of corruption, collusion, or abuse of authority exists, responsibility must be fixed without political discrimination.
Because the real question is not merely about $10.6 billion.
The real question is about Pakistan’s economic future.
How long can a country continue paying for electricity that its citizens and industries increasingly cannot afford? How long should honest consumers bear the cost of theft, inefficiency, poor planning, and excessive contractual obligations?
Pakistan needs answers—not accusations.
It needs transparency—not political point-scoring.
It needs institutional accountability—not another burden placed on the consumer.
The time has come for the electricity bill to carry more than a demand for payment. The public deserves to understand the complete financial story behind that bill.
Because citizens are not merely electricity consumers.
They are the ultimate financiers of the power sector—and they have every right to ask where their money is going.
