ISLAMABAD, July 19: The National Electric Power Regulatory Authority (NEPRA) has issued long-pending notifications for K-Electric’s (KE) supply, distribution, and transmission tariffs for the 2023–24 to 2029–30 period under the Multi-Year Tariff (MYT) framework. The regulator clarified that the federal government’s pending review motion does not legally bar NEPRA from issuing these notifications.
Amendments made to the NEPRA Act in 2021—amid delays and pressure from the IMF and World Bank—empowered NEPRA to notify tariffs directly if the government fails to act within the given timeframe. NEPRA stated that any future changes arising from the government’s review motion would be reflected in updated tariff notifications.
The newly approved average power supply tariff for KE stands at Rs 39.97 per kWh, comprising power purchase (Rs 31.96), transmission cost (Rs 2.86), distribution (Rs 3.31), supply margin (Rs 2.28), and a prior year adjustment of negative Rs 0.44 per unit.
KE’s total revenue requirement for FY 2023-24 has been estimated at Rs 606.92 billion, with a supply margin of Rs 34.68 billion. However, recovery losses of Rs 40 billion and Rs 57 billion are projected for FY 2023-24 and FY 2024-25 respectively, due to under-recovery rates of 8.5% and 9.5%.
NEPRA noted that KE could face financial strain in the initial two years of the MYT, as the return on distribution—estimated at Rs 21.6 billion—may not offset recovery losses. This, the regulator warned, could affect the company’s financial viability and the broader power system.
Additionally, NEPRA approved a distribution tariff of Rs 3.31/kWh and Rs 2.684/kWh to support investment of Rs 43.45 billion over the MYT period.
Story by Mushtaq Ghumman
