ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday reprimanded officials from the Power Division for their disorderly conduct during a hearing on the review petition concerning K-Electric’s (KE) write-off claims.
“You are here to explain your case, despite admitting you lack authorization from the Federal Government. We will listen to you, but this is absolutely not the way to behave,” remarked Nepra Member (Law) Amina Ahmed, addressing the Power Division team’s disruptive interventions.
The Power Division was represented by Additional Secretary (Power Finance) Mehfooz Bhatti and Naveed Qaiser from PPMC, while KE’s side was led by CFO Aamir Ghaziani and legal counsel. Interveners including Arif Bilwani, Rehan Jawed, and Tanveer Barry also presented arguments.
Fee Irregularity & Rs 50bn Write-Off Debate
Nepra Member (Technical) Rafique Ahmad Shaikh highlighted that the Power Division had failed to pay the mandatory fee required for filing a review petition. The Authority reminded officials of its June 2025 decision allowing KE Rs 50.013 billion in write-offs, which the Division has since challenged—raising objections over a GST component of Rs 6.619 billion. Nepra Chairman Waseem Mukhtar rejected the Division’s GST arguments, referencing the National Electricity Plan 2023–27, and pressed officials to clarify their position on the Rs 50bn claims.
Bhatti, however, evaded direct answers, stating only that the review petition had been filed “to protect consumer interests.” His colleague Qaiser later conceded that any prudent portion of the claims should be allowed under the Consumer Service Manual (CSM).
Hearing Descends into Disorder
The session grew heated, with multiple parties speaking out of turn, prompting Member Shaikh—who chaired the hearing—to intervene: “I cannot conduct the hearing under such disorder. Everyone is speaking without the Authority’s permission. Only Nepra Members are allowed to intervene.” He also expressed frustration over the sector’s inefficiencies, noting that the power sector consumes 40% of the national budget, asking pointedly: “Who are we fooling?”
KE’s Position & Interveners’ Concerns
KE’s CFO clarified that under the Sales Tax Act 1990 (till March 2023), power distributors were obligated to deposit sales tax to the FBR on billed amounts, even if unrecovered from consumers—making sales tax part of recovery losses. KE insisted its claims met all requirements, with verification by independent auditors.
Interveners raised strong objections:
Bilwani opposed the write-off approvals in current form.
Jawed criticized the continuation of Direct Subsidy Support (DSS) at Rs 3.23/kWh, costing Rs 1.225 trillion, and argued KE consumers unfairly bear costs of circular debt created by inefficient DISCOs.
Barry supported Nepra’s stance on tariff control periods, urging KE to finalize a gas supply agreement with SSGC to ensure plant availability.
The contentious hearing underscored deep divisions over KE’s write-off claims, subsidy mechanisms, and broader power sector inefficiencies, with Nepra warning that future proceedings must be conducted in an orderly manner.
Story by Mushtaq Ghumman
