The National Electric Power Regulatory Authority (NEPRA) rejected the NGC review petition and reaffirmed its decision to move Pakistan toward a competitive electricity market. The regulator dismissed the petition filed by the National Grid Company (NGC) against the registration of the Central Power Purchasing Agency Guarantee Limited (CPPA-G) as a Special Purpose Agent (SPA) and the approval of the Agency Code.
In its detailed order issued on May 13 2026 NEPRA stated that the NGC review petition failed to identify any legal error or provide fresh evidence that could justify a review under the NEPRA Review Procedure Regulations 2009. The Authority said the petition did not meet the legal requirements necessary for reopening the earlier determination.
The decision marks another major step in the implementation of the Competitive Trading Bilateral Contract Market (CTBCM) framework in Pakistan’s power sector. NEPRA maintained that the transition toward a direct bilateral market system remains necessary to improve transparency financial discipline and accountability.
NEPRA Rejects Centralized Billing Requests
The NGC review petition mainly challenged the shift from centralized billing and settlement through CPPA-G to direct contractual arrangements between market participants. NGC requested the continuation of the existing mechanism for recovering Use of Transmission System Charges (UoTSC) and Pak Matiari Lahore Transmission Company (PMLTC) charges.
However NEPRA rejected these demands and stated that the CTBCM framework requires direct billing settlement and payment recovery between market participants. The regulator said the old centralized pooling system no longer fits within the new market model.
According to the Authority the direct contractual system will force entities to become financially responsible and improve payment discipline in the power sector. NEPRA explained that centralized arrangements often create inefficiencies and weaken accountability among market players.
The regulator also stressed that Pakistan’s power sector needs structural reforms to reduce circular debt and improve operational performance. Officials believe competitive market practices can encourage better financial management and reduce long term risks.
PMLTC Charges Not Treated as Legacy Contracts
The NGC review petition also argued that PMLTC charges should receive the status of legacy pass through liabilities. NEPRA rejected this position and clarified that only Power Purchase Agreements (PPAs) and Energy Purchase Agreements (EPAs) qualify as legacy contracts under the market framework.
The Authority stated that transmission related liabilities do not fall within the legal definition of legacy contracts. As a result NEPRA refused to allow continued recovery of transmission charges under older arrangements.
The decision strengthens the regulator’s position on implementing a fully competitive electricity market without exceptions that could weaken the new system.
Energy experts say the ruling sends a clear message that NEPRA intends to move forward with reforms despite opposition from some stakeholders within the power sector.
NEPRA Dismisses Concerns Over Payment Risks
NGC also raised concerns about payment security under the direct billing model. The company argued that transmission entities could face higher risks if centralized payment mechanisms ended.
However NEPRA dismissed these concerns and stated that centralized systems only redistribute payment risks rather than eliminate them. The Authority maintained that each market participant must take responsibility for managing receivables and contractual obligations.
According to the regulator direct contractual arrangements will encourage stronger financial discipline and better risk management practices among electricity sector companies.
The Authority also rejected several additional proposals submitted through the NGC review petition. These included requests to introduce a pay first dispute later mechanism extend delayed payment surcharge provisions to transmission charges and grant priority payment status to NGC.
NEPRA ruled that such measures would contradict the principles of a competitive bilateral electricity market. The regulator emphasized that no entity should receive special financial protections outside the approved market framework.
Competitive Electricity Market Reforms Continue
The rejection of the NGC review petition represents another important development in Pakistan’s ongoing electricity sector reforms. The CTBCM framework aims to replace the old centralized power purchasing structure with a market based system.
Under the new model electricity buyers and sellers will enter direct contracts instead of relying on a single centralized purchasing entity. Policymakers believe this transition can improve efficiency encourage competition and reduce financial pressures within the power sector.
Pakistan’s electricity sector has struggled for years with circular debt delayed payments and governance issues. Authorities hope market reforms will help address these longstanding problems and create a more sustainable energy system.
Despite concerns raised by some market participants NEPRA has continued to support reforms designed to modernize the electricity market and improve investor confidence.
Analysts believe the successful implementation of the CTBCM framework could reshape Pakistan’s energy landscape and strengthen financial accountability across the sector.