PHC seeks response in IPP audit case as tariff pressure grows

The Peshawar High Court on Tuesday opened a potentially significant new front in Pakistan’s long-running power tariff debate by seeking a response from the Central Power Purchase Agency in a petition demanding a forensic audit of agreements signed with independent power producers. The matter came up before a two-member bench in Peshawar, where the petitioners argued that consumers and businesses were continuing to bear the cost of payment arrangements they consider excessive and insufficiently scrutinised.

The petition was filed by the Sarhad Chamber of Commerce and Industry, which asked the court to order a forensic review of all power purchase agreements with IPPs and to push for immediate steps that could reduce the financial burden on electricity users. According to the plea, the existing framework has allowed undue payments at the expense of consumers, while tariff relief has remained out of reach for households and industry already under pressure from high energy costs.

During the hearing, the bench issued notices to the CPPA and several IPPs, directing them to submit replies. The case also names other respondents connected to the power sector structure, including the federal government through the power division, the National Electric Power Regulatory Authority and Peshawar Electric Supply Company. The petitioners further opposed the renewal of expiring agreements or the signing of fresh ones unless they are subjected to a transparent and competitive process based on take-and-pay principles rather than the costlier arrangements that critics say have inflated capacity payments.

The chamber’s counsel, Shumail Ahmad Butt, told the court that the demand for an audit was not based on speculation but on concerns that had already surfaced in parliamentary review. He argued that earlier official scrutiny had raised questions about how some producers were compensated and whether regulators had adequately examined the financial assumptions behind those returns. Nepra was represented in court by lawyer Farooq Afridi, while the wider focus of the hearing remained on whether past findings had been ignored despite their implications for the public.

A central part of the petition relies on the work of a Senate standing committee sub-committee formed in 2019 to investigate high electricity tariffs, capacity charges and the profitability structure of IPPs. According to the arguments presented in court, that parliamentary review found that some producers had earned returns well above the level permitted by the regulator. The petitioners said the report concluded that excessive payments had imposed a heavy cost on consumers and that the state should have moved more decisively to correct the imbalance.

The plea also revives one of the most politically sensitive questions in Pakistan’s energy economy: whether the country’s power purchase model has locked consumers into a cycle of expensive electricity, mounting capacity payments and repeated disputes over fairness. For years, businesses, trade groups and reform advocates have argued that the tariff structure punishes productive sectors, weakens competitiveness and adds to wider economic strain. The issue is particularly important in Khyber Pakhtunkhwa, where industrial and commercial groups have repeatedly complained that rising power costs are eroding already thin margins.

At the same time, the case carries implications beyond a single courtroom battle. Any move toward forensic review, contract revision or recovery of alleged excess gains would feed directly into the broader national discussion on circular debt, power sector reform and the credibility of long-term state commitments. While consumer groups may see the petition as a route to fairer pricing, investors and producers are likely to watch closely for signs of how the judiciary balances accountability with contractual certainty in a sector that remains central to Pakistan’s economic stability.

No final relief was granted on Tuesday, but the proceedings have ensured that the issue will stay firmly in public view. Once responses are filed by the CPPA and the companies concerned, the court will have to decide whether the case justifies deeper judicial intervention or whether the matter should be left to executive and regulatory action. Either way, the hearing has sharpened pressure on the government and sector institutions to explain whether past concerns over IPP payments were properly addressed and what that means for consumers facing persistently high electricity bills.