Pakistan’s electricity consumers are facing a strange and unfair situation. They are paying billions of rupees every month to power companies even when those companies are not producing electricity.
According to the Pakistan Electricity Review 2026, power generation has decreased, but the amount paid as “capacity charges” has increased sharply. These charges are fixed payments made to power producers simply for keeping their plants ready, whether they generate electricity or not.
In the last fiscal year, capacity payments made up a massive 61% of the total cost of electricity. This means more than half of the money collected from consumers through electricity bills goes towards paying power plants that often remain idle or run at very low capacity.
Thermal power plants, in particular, are heavily underutilized. Many plants operate at less than half their full capacity, yet consumers continue to bear the fixed cost burden. This system has resulted in high electricity bills despite lower actual power production.
Experts say this inefficiency is one of the main reasons behind expensive electricity in Pakistan. There is a growing demand for urgent reforms in the power sector to reduce unnecessary capacity payments and provide relief to consumers.
