LAHORE: While declaring a plea questioning the legality of capacity payments to power producers non-maintainable, the Lahore High Court (LHC) held that government economic, financial, and regulatory policies fall outside its jurisdiction.
Justice Ahmad Nadeem Arshad announced the verdict, which had been reserved on the maintainability of the petition filed by activist Ashba Kamran. The petitioner had challenged the collection of capacity charges being received from the masses and paid to power producers that were allegedly not producing electricity.
In his written order, Justice Arshad observed that policymaking in the energy sector falls strictly within the domain of the executive and Parliament, not the judiciary. He held that the court cannot function as an appellate forum for reviewing economic, financial, and regulatory policies, adding that a mere disagreement with a policy does not constitute sufficient grounds for invoking the court’s constitutional jurisdiction through a writ petition. The petitioner had contended that the government, under the Constitution, cannot impose any tax without the approval of Parliament. She alleged that the government had violated constitutional mandates by imposing an unlawful levy in the form of capacity charges, introduced merely on the recommendations of the federal cabinet and the National Electric Power Regulatory Authority (NEPRA) without a proper legislative mechanism.
Furthermore, she argued that pegging payments to local investors to the USD exchange rate was unconstitutional. She claimed that power companies were being paid trillions of rupees despite keeping their plants non-operational, calling it a grave injustice to the public. According to the plea, a staggering Rs 18.10 trillion had already been paid to Independent Power Producers (IPPs) for unused electricity generation capacity. The petitioner had urged for court’ directives to the government to ensure payments are only made against actual electricity supplied to the national grid, to recover the trillions of rupees paid in excess to the IPPs, and to hold the responsible officials accountable.
