Govt to Let Big Power Users Choose Their Electricity Supply Company

The federal government has laid out plans to open up Pakistan’s electricity market, allowing consumers using 1 MW or more to select their own power supplier starting January 2026.  The development was confirmed by the Power Division Secretary Dr. Fakhar Alam Irfan, who briefed the National Assembly’s Standing Committee on Power. He confirmed that the government is moving toward an open electricity market to introduce competition and, ultimately, push for more reasonable pricing. The change marks a break from long-standing regional monopolies.  Under the new scheme, consumers will be able to buy electricity from any company of their choice, rather than being restricted to their local DISCO (distribution company). The move comes alongside other structural reforms already underway. In July, government officials announced the launch of a direct electricity sale system for commercial and industrial consumers. That plan would allow them to purchase power directly from producers rather than relying on traditional distribution networks. Also, an energy sector reform for a competitive electricity market was expected to roll out within months, one that would permit independent power producers and bulk consumers to trade power openly. But challenges remain. Pakistan’s circular debt burden remains high. Dr. Irfan noted that while the sector’s losses have come down from Rs. 600 billion in 2024 to Rs. 397 billion, the debt still looms as a fundamental barrier to wholesale reform. Karachi, which continues to be served almost exclusively by K-Electric, was flagged during the session as a special case. Committee members warned that despite the policy buzz, implementation in megacities with entrenched systems could lag. Proponents say this shift could transform the electricity sector in Pakistan. Consumers would finally gain choice, similar to how mobile users can pick among telecom providers. It would also force utilities to be more efficient and responsive, rather than relying on guaranteed demand. But the transformation will have to manage risks: power system stability, contractual liabilities, and the balance between old and new providers. The success of the open market model will depend heavily on regulatory oversight, infrastructure readiness, and investor confidence.