Power sector: Govt has moved to overhaul regulatory regime: Aurangzeb

Islamabad, Pakistan - The government has initiated a comprehensive overhaul of the power sector regulatory regime, as Finance Minister Muhammad Aurangzeb outlined his vision for a market structure that promotes competition, private investment, efficiency, and improved service quality, while safeguarding consumers. During the second meeting of the Steering Committee on Power Sector Regulatory Regime, Aurangzeb discussed the need for a regulatory framework that can effectively respond to technological advancements, while fostering efficiency, investment, and competition.

Key challenges highlighted included legacy capacity obligations, shifting grid demand patterns, and the need to enhance service quality and regulatory predictability. The committee explored potential solutions, such as separating network and supply functions, with distribution network operators ensuring the efficient operation and maintenance of the grid, while competitive supply businesses operate under an appropriate regulatory framework.

The discussion also centered on the significance of a transparent regulatory regime with risk allocation and tariff methodologies that encourage investment and protect consumer interests. The committee considered the potential for Battery Energy Storage Systems (BESS) and other emerging technologies, as well as the role of distribution companies in undertaking ancillary and infrastructure-related businesses.

Aurangzeb stressed the importance of maintaining stakeholder ownership and ensuring the reform process remains iterative, evidence-based, and aligned with the goal of creating a sustainable, competitive, and long-term viable power sector.