ISLAMABAD – In a move that could reshape Pakistan’s power procurement policies, the Sahiwal Coal Power Plant (Huaneng Shandong Ruyi Pakistan Energy Ltd) has taken NEPRA and CPPAG to court, contesting rules that require coal purchases at the lowest available price.
The company wants clearance to import coal from a chosen supplier at a pre-negotiated discount rate, arguing that the arrangement is embedded in its Power Purchase Agreement and original financing model. HSRPEL claims this would guarantee long-term fuel security and price stability.
Regulators disagree. NEPRA and CPPAG cite Public Procurement Rules 2004 and competitive bidding requirements for Independent Power Producers, which exist to ensure that electricity consumers pay the lowest possible rates. Since coal expenses are passed directly into power tariffs, they argue, the “lowest price” safeguard is non-negotiable.
Under Section 31 of the NEPRA Act, only “prudently incurred” costs can be recovered from consumers — a principle NEPRA reinforced in a June 26, 2025 decision. The regulator has consistently urged power producers to secure the highest possible supplier discounts to keep tariffs down.
Legal experts warn that if the court sides with HSRPEL, it could encourage other coal-based plants to sidestep bidding processes, undermining transparency and locking the country into higher electricity costs. They also point to possible jurisdictional issues under the Specific Relief Act, questioning whether a civil court can intervene in such regulatory matters.
The outcome of the case could have significant implications for Pakistan’s energy sector, potentially testing NEPRA’s ability to enforce competitive procurement standards and protect consumer interests.