An Open Letter to the Chairman, NEPRA
🔳 13 Inquiries Regarding IPPs
1. Excess Capacity & Grid Constraints
Given that the national grid lacked the wheeling capacity to transmit surplus power, what was the strategic rationale behind commissioning excessive power plants? Furthermore, what is the socio-economic justification for shifting the financial burden of these redundant capacity payments onto the general public?
2. Dollar Indexation & Exchange Rate Pass-through
Why was the 'Dollar Indexation' clause integrated into power purchase agreements (PPAs)? Why must the domestic consumer bear the brunt of currency devaluation while investors remain entirely insulated from exchange rate volatility?
3. Return on Equity (ROE) vs. Risk Profile
In the presence of Sovereign Guarantees, Dollar Indexation, and guaranteed Capacity Payments, what justifies a 15% to 18% dollar-indexed Return on Equity (ROE)? Does this exorbitant return align with a 'risk-free' profile where the investor faces zero commercial liability, and is it sustainable within the context of Pakistan’s macroeconomic constraints and consumer purchasing power?
4. Asymmetric Risk Sharing in Fuel Costs
To what extent is it equitable to transfer the entirety of fuel price hikes to the end-consumer? In standard power procurement frameworks, shouldn't the principle of 'Risk Sharing' apply to both the investor and the state?
5. Moral and Legal Grounds for Capacity Charges
What is the legal and ethical basis for disbursing multi-billion rupee capacity payments to underutilized plants? Were these decisions consistent with the broader public interest and the actual energy demand-supply forecasts of the country?
6. Legality of AT&C Losses in Tariff Structure
What is the legal standing for incorporating 'Aggregate Technical and Commercial' (AT&C) losses into the consumer tariff? Does this not violate the fundamental 'Cost of Service' principle, whereby the state penalizes honest, bill-paying citizens for its own administrative failures and systemic power theft?
7. Transparency & Exit Clauses for Public Audit
Within the current international investment framework and commercial laws, is there a 'Legal Provision' or 'Exit Clause' that allows the state to declassify the financial intricacies of these PPAs for a comprehensive Parliamentary and Public Audit in the supreme national interest?
8. Regulatory Autonomy vs. Executive Policy
How does NEPRA maintain the delicate balance between its role as an independent regulatory authority and overriding government policy directives? Can NEPRA cite instances where it exercised its autonomy to reject government pressure in favor of consumer protection?
9. Impact of NAB Investigations & Settlements
What is the net recovery from past NAB investigations and subsequent 'Settlement Agreements' with IPPs? Crucially, were these recovered amounts ever translated into tariff relief for the general public by NEPRA?
10. Incentivizing vs. Discouraging Solar Prosumers
While the national grid continues to grapple with load-shedding, what is the policy justification for discouraging net-metering—a model where citizens invest their own capital to augment the national energy mix?
11. Economic Modeling of Consumer Affordability
What specific 'Economic Model' does NEPRA utilize to gauge the impact of tariff hikes on the consumer's purchasing power? Has a tariff increase ever been summarily rejected solely on the basis that it exceeds the public's capacity to pay?
12. Efficacy of Public Hearings
What is the institutional mechanism for integrating feedback from 'Public Hearings' into final regulatory decrees? Quantitatively, what is the 'Success Rate' of public interventions in altering NEPRA’s proposed decisions?
13. Institutional Failure in International Arbitration
Why has the State of Pakistan consistently faced adverse rulings in international forums (such as the LCIA) regarding power sector disputes? Is this a failure of the legal framework, contractual drafting, or a lack of robust representation?
🔲 Public Investigative Series | Episode 24
Subject: Rectifying Pakistan’s Power Sector
An Open Letter to the Chairman, NEPRA
🔺 When institutions remain evasive regarding the facts, it becomes the fundamental duty of the citizenry to seek the truth.
Written and Researched by: Syed Shayan
To,
The Chairman,
Mr. Waseem Mukhtar, National Electric Power Regulatory Authority (NEPRA),
Islamabad.
Dear Sir,
This letter does not merely represent the subjective opinion of an individual; it is the collective voice of millions of electricity consumers across Pakistan. These citizens are navigating a state of perpetual economic duress, driven by spiraling electricity tariffs, convoluted billing structures, non-transparent IPP contracts, and policy frameworks that appear increasingly detached from the public’s fiscal reality. The repercussions of this crisis are no longer confined to household distress but have permeated our industrial and commercial landscapes, threatening the very foundations of our national economy.
The inquiries presented herein have been meticulously synthesized under the auspices of SyedShayan.com, a think tank dedicated to the rigorous analysis of the power sector and Independent Power Producers (IPPs). Our mandate is to foster an informed citizenry through research-driven clarity and accountability.
Under the NEPRA Act, the Authority is legally mandated to ensure transparency, impartiality, and the overarching protection of consumer interests. Consequently, this letter serves as a formal public questionnaire that necessitates an unequivocal response.
We respectfully urge that the answers to these queries—buttressed by legal and technical citations—be published on NEPRA’s official website. Alternatively, we propose a dedicated Public Hearing involving civil society representatives, industry experts, and stakeholders. Such an exercise is essential to uphold the ‘Right to Information’ as enshrined in the Constitution of Pakistan.
Sir, we recognize your standing as a seasoned professional engineer with a career defined by diligence. Given your extensive expertise and long-standing tenure in the energy sector, the public expects a reasoned, documented, and transparent response to these critical inquiries. Our objective is to attain clarity on matters that directly impact the consumer's wallet, the national exchequer, and the institutional integrity of the power sector.
While we acknowledge that you have inherited a legacy of systemic inefficiencies, historical policy lapses, and the heavy burden of prior suboptimal decisions, the responsibility of your office demands that these 13 fundamental questions be answered with absolute clarity.
The Context:
Is it an established fact that while the average national demand oscillates between 15,000 and 18,000 MW, the total installed capacity has surged to approximately 45,000 MW? If so, what were the fundamental projections justifying such a vast surplus? Furthermore, why were power plants commissioned when the national grid lacked the inherent capacity to evacuate and transmit their output? Is it a just regulatory policy to transfer the financial liability of "undelivered electricity"—caused by transmission constraints—onto the consumers in the form of Capacity Payments?
Detailed Clarifications Sought:
The Context:
Is it a fact that numerous Power Purchase Agreements (PPAs) indexed profits, debt servicing, and Operation & Maintenance (O&M) costs to the US Dollar? If so, under which specific Power Policy and NEPRA regulatory framework was this finalized? Furthermore, as an independent regulator, did NEPRA conduct a sensitivity analysis regarding currency devaluation and its subsequent impact on consumer purchasing power before approving these clauses?
Detailed Clarifications Sought:
The Context:
In the presence of Sovereign Guarantees, Dollar Indexation, and guaranteed Capacity Payments, what is the justification for granting IPPs a Dollar-indexed Return on Equity (ROE) ranging from 15% to 18% (and in some instances, up to 30%)? Does this profit margin align with the 'Risk Profile' of projects where commercial loss has been effectively eliminated? Furthermore, is such a high rate of return sustainable given the current state of the national economy and the diminishing purchasing power of consumers?
Detailed Clarifications Sought:
The Context:
Does the current tariff regime operate on the principle that every increase in fuel price is directly recovered from consumers, while power generation companies remain insulated from financial risk? Globally, utilities are set rigorous efficiency targets; however, in Pakistan, what justifies shifting the entire burden of mismanagement and rising fuel costs onto the public under the guise of Fuel Cost Adjustments (FCA)?
Detailed Clarifications Sought:
The Context:
Does NEPRA possess records of power plants that continue to receive full Capacity Payments despite demonstrating low operational efficiency and under-utilization? When NEPRA’s own State of Industry reports highlight flaws in dispatch efficiency, on what basis are these payments sustained, and which plants have faced penal actions or financial disallowances to date?
Detailed Clarifications Sought:
The Context:
What is the legal standing for incorporating Aggregate Technical & Commercial (AT&C) losses into the consumer tariff? Does this not contravene the 'Cost of Service' principle, whereby the state penalizes honest, bill-paying citizens for its administrative failures and systemic theft? Is there any legal or ethical justification for reclassifying "inefficiency" as a "cost of service"?
Detailed Clarifications Sought:
The Context:
Can the Power Purchase Agreements (PPAs) between IPPs and purchasing agencies be declassified and made public to clarify the terms of financial liabilities, profit margins, and sovereign guarantees? Since these payments are sourced directly from public funds, what is the legal justification for shielding these contracts under the veil of "commercial confidentiality," and does this not violate the spirit of the Right to Information Act, 2017?
Detailed Clarifications Sought:
The Context:
Does NEPRA exercise full autonomy in tariff determination, licensing, and other regulatory mandates, or is its independence compromised by administrative pressure from other state institutions? Given that the NEPRA Act is rooted in the principles of impartiality and transparency, this question is of fundamental importance.
Detailed Clarifications Sought:
The Context:
Investigations by the National Accountability Bureau (NAB) and various government committees have previously flagged concerns regarding excessive profits, capacity charges, and O&M expenses. Following the recent announcement of the early termination of 5 IPP contracts, the public deserves a transparent accounting of the practical outcomes of these actions.
Detailed Clarifications Sought:
Is it correct that recent solar regulations and Net Metering/Net Billing changes have tightened conditions for new consumers while maintaining policy protection for existing ones? With the shift toward Net Billing in 2026, the complete rationale for these changes must be presented to the public.
Detailed Clarifications Sought:
The Context:
Does NEPRA conduct comprehensive impact assessments—either before or after major tariff hikes—to gauge the effects on domestic consumers, small businesses, essential commodity prices, and overall inflation? Evidence suggests that electricity pricing is a primary driver of social distress and poverty in middle-to-low-income households.
Detailed Clarifications Sought:
The Context:
Are NEPRA’s Public Hearings truly effective, accessible, and meaningful consultative forums for ordinary consumers, solar prosumers, and small business owners? Reports frequently highlight issues with disorganized hearings and limited access to supporting data, particularly concerning new solar regulations.
Detailed Clarifications Sought:
The Context:
Why has the State of Pakistan consistently faced adverse rulings in international forums, such as the London Court of International Arbitration (LCIA), regarding power sector disputes?
Detailed Clarifications Sought:
Dear Chairman,
These inquiries are raised in the supreme public interest, and a formal clarification is the need of the hour. When electricity tariffs, power agreements, solar policies, and regulatory decrees directly impact the lives, livelihoods, and investments of millions of citizens, providing a written and transparent response becomes the fundamental responsibility of your institution.
We urge that the responses to these questions be officially published on NEPRA’s website, accompanied by relevant data, legal citations, and implementation timelines. Such a step is essential to bridge the trust deficit between state institutions and the citizenry and to establish a benchmark for national transparency.
Yours sincerely,
Syed Shayan
President / CEO
SyedShayan.com
Think Tank for National Development,
Real Estate Syndication and Community Living
Email: mail@syedshayan.com
3rd May, 2026
The Pakistan judiciary should take steps for this.