A technician repairs power supply lines at a power plant. PHOTO: REUTERS
ISLAMABAD:
The National Electric Power Regulatory Authority (NEPRA) has approved the country’s first-ever wheeling auction process, clearing the way for competitive electricity trading and declaring January 22, 2026, as the official start of commercial market operations.
According to a statement issued by the regulator on Tuesday, the decision endorses the auction mechanism submitted by the Independent System and Market Operator (ISMO), allowing allocation of up to 800 megawatts of electricity through competitive bidding while ensuring recovery of stranded costs tied to market liberalisation.
The approval follows federal policy changes and the issuance of Framework Guidelines for Wheeling Auctions in January 2026. NEPRA said the process, shaped through stakeholder consultation, aligns with principles of transparency, non-discrimination and procedural fairness as Pakistan transitions toward a competitive electricity market.
Addressing key concerns, the regulator directed ISMO to improve transparency around transmission constraints by publishing an interim congestion disclosure note with each auction. This is intended to guide bidders in the absence of a full transmission node assessment, expected by January 2027.
NEPRA also mandated conflict-of-interest declarations for all seven members of the auction committee and introduced anti-collusion safeguards, including a cap of 20% of total auctioned capacity per group. ISMO must publish aggregated auction data, including bids received and allocation outcomes, after each round.
The regulator upheld core parameters set by the government, including the 800MW cap, one-year bid payments and absence of bid limits, noting these are not subject to revision. The first auction is expected around June or July 2026. Federal Minister for Power Sardar Awais Ahmed Khan Leghari said the declaration of the Competitive Market Operations Date marked a defining milestone in Pakistan’s power sector reform journey, signalling a shift from a single-buyer model to a competitive and market-based framework.
