Business Recorder
ISLAMABAD: The Independent System and Market Operator (ISMO) and National Electric Power Regulatory Authority (Nepra) are at odds over key aspects of the Integrated System Plan (ISP) 2025-35, with both sides presenting contrasting views on project inclusion, demand projections and regulatory compliance. In its detailed response to Nepra’s observations of March 11, 2026, ISMO defended the exclusion of certain hydropower projects from the Indicative Generation Capacity Expansion Plan (IGCEP) 2025, arguing that evolving demand patterns, project delays and policy considerations necessitated revisiting the “committed projects” list. ISMO maintained that the ISP 2025-35 has been prepared in accordance with the National Electricity Policy 2021 and National Electricity Plan 2023-2027, which require periodic updates to reflect changing sector dynamics. READ MORE: ISMO submits revised 10-year IGCEP However, Nepra has taken a firm position that the exclusion of projects such as the 88MW Gabral Kalam and 157MW Madyan hydropower plants is inconsistent with earlier policy decisions. The regulator emphasised that these projects were declared “committed” under IGCEP-2021, based on assumptions approved by the Council of Common Interests (CCI), and therefore must be retained in subsequent plans. “The exclusion of such projects is inconsistent with approved policy directives and requires reconsideration,” Nepra maintained in its observations. Responding to this, ISMO argued that while IGCEP-2021 assumptions were approved by the CCI, subsequent iterations must incorporate updated demand forecasts, project progress and cost considerations. It warned that treating earlier commitments as fixed would undermine the objective of least-cost and optimized planning. ISMO further revealed that a technical working group formed in November 2023—headed by the CEO of Central Power Purchasing Agency Guarantee Limited—revised the criteria for classifying projects as “committed.” The group included representatives from Private Power and Infrastructure Board, National Grid Company, Nepra and other stakeholders. Under the revised criteria, projects must demonstrate at least 10 percent physical and financial progress and meet key development milestones. ISMO stated that Gabral Kalam and Madyan projects failed to meet these thresholds, with progress remaining below 3 percent and construction yet to commence, while their commercial operation dates have been pushed beyond initial projections. Nepra; however, stressed that policy directives require continuity in committed projects and that any deviation must be justified within the approved framework. On renewable energy, Nepra also raised concerns that several projects of K-Electric—including solar and hybrid projects already approved through competitive bidding—have not been adequately reflected in ISP-2025. The Authority noted that these projects represent the first successful competitive procurement under the regulatory regime and must be incorporated into future planning. ISMO, in response, clarified that approval of Requests for Proposals (RFPs) or inclusion in Power Acquisition Programmes does not automatically qualify projects as “committed.” It added that inclusion of such projects without meeting prescribed criteria would increase system costs, citing an additional $0.19 billion impact in its sensitivity analysis. Another major point of contention relates to demand projections. Nepra highlighted serious inconsistencies between demand estimates used in ISP-2025 and those reflected in Distribution Investment Plans (DIPs) of Discos and Power Purchase Price forecasts of CPPA-G. It called for a unified, consensus-based demand outlook through comprehensive stakeholder engagement. ISMO; however, maintained that it has fulfilled its mandate under the Grid Code by consolidating and finalising demand forecasts, and any deviation by Discos would constitute a violation of the Code. It also pointed to a significant downward revision in demand projections due to slower economic growth and rapid expansion of rooftop solar systems. On the transmission side, Nepra expressed dissatisfaction over the submission of a “TSEP-2024-34 Addendum” instead of a complete Transmission System Expansion Plan (TSEP-2025), noting that major revisions—including exclusion and reassessment of several transmission projects—are required. ISMO responded that while overall demand for the national grid declined, peak demand at the Disco level remained largely unchanged, justifying continuity in network expansion plans, with only timelines revised. Nepra also raised concerns over outdated Commercial Operation Dates (CODs) used in ISP-2025, citing discrepancies between timelines provided by executing agencies such as Water and Power Development Authority and Pakistan Atomic Energy Commission and those reflected in the plan. Copyright Business Recorder, 2026
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