High Court Petition Demands Suspension of Capacity Payments to IPPs Amid Forensic Audit

A petition filed in the high court pleaded that the Supreme Court had ordered a forensic audit of the independent power producers (IPPs). Instead of compliance with the order of the apex court capacity charges payments are being made, the petitioner’s counsel said.

The petitioner seeks a court order for suspension of the capacity payments until the forensic audit is conducted.

Capacity payment refers to the payment made monthly by consumers to the power-producing companies to maintain their capacity to generate electricity, ensuring that additional demand can be met.

Notably, these capacity payments to IPPs are made in US dollars, not in Pakistani rupees.

It is pertinent to mention here that the Government of Pakistan estimated capacity payments to IPPs amounting to Rs 2,091 billion for the current fiscal year.

The escalating electricity costs in Pakistan are largely attributed to capacity charges, with 22 government-owned companies accounting for a substantial 48% of these charges.

In the past three months alone, these companies have received a staggering Rs169.36 billion in capacity charges, according to sources. This financial allocation continues despite many of these power plants not operating at full capacity.