Multi-Vender Electricity Distribution Bill: NA panel urged to expedite consideration process
The purpose of the Bill is to promote fair competition and end electricity distribution monopoly in urban areas.
According to the Bill, it is expedient to provide for the establishment of a competitive electricity distribution framework to safeguard the rights of consumers, enhance efficiency, reduce costs, and eliminate monopolistic practices in the power sector, especially in urban metropolitan regions such as Karachi.
The proposed Bill says Constitution Article 38 (c) mandates the equitable distribution of resources and the provision of affordable utilities to all citizens.
The Act states that unless there is anything repugnant in the subject or context: (i) Authority 'means the National Electric Power Regulatory Authority (Nepra), established under the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (Act XL of 1997);(ii) 'distribution Licensee' means any person or company licensed by Nepra to distribute electricity; (iii) 'Multi-vendor model' means a framework allowing more than one distribution licensee to operate in the same geographical area.
The Bill further states that no single electricity distribution licensee shall enjoy exclusive rights to distribute electricity in any urban or metropolitan area with a population exceeding one million.
The Authority shall, within ninety days of the commencement of this Act, establish a mechanism to issue additional distribution licences in regions currently served by a single entity, enabling consumers to choose among multiple service providers.
Nepra shall ensure: (i) transparent licensing procedures; (ii) fair and non-discriminatory access to transmission infrastructure; (iii) protection of consumer rights against over-billing and service abuse; and (iv) periodic audits and performance benchmarking of all licensees.
Existing licensees shall be required to un-bundle their operations and open their distribution networks to other licensees within twelve months of the commencement of this Act, as prescribed by the rules.
Any licensee that obstructs or delays access to distribution infrastructure for other licensees shall be liable to fines up to one million rupees and possible suspension of licence.
The federal government may, by notification in the official Gazette, make rules for carrying out the purposes of this Act.
The federal government may, within one year of the commencement of this Act, take necessary measures to remove difficulties in the implementation of this Act.
According to the statement of objects and reasons, the electricity distribution sector in Pakistan's urban areas is currently monopolised by single entities, most notably in Karachi where K-Electric holds exclusive distribution rights. This monopoly has led to persistent issues such as inefficiency, over-billing, consumer grievances, and lack of accountability.
After the 18th Constitutional Amendment (2010), energy became a concurrent subject, empowering provinces to formulate policies, regulate, and implement frameworks for generation, transmission, and distribution of electricity. However, the Nepra continues to exercise central regulatory control over distribution licensing, thereby limiting the operational autonomy of provinces.
The Bill seeks to reform this imbalance by: (i) ending distribution monopolies and introducing a competitive framework; (ii) enabling consumer choice in electricity service providers; (iii) empowering provinces to establish regulatory bodies and oversee localized transparent distribution and; (iv) to attract private investment and fostering accountability-driven, technology-oriented services.
The proposed law is in line with the spirit of the 18th Amendment, aiming to decentralize control and ensure efficient, equitable electricity distribution benefiting both the provinces and the citizens.
Copyright Business Recorder, 2025
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