KARACHI: The Power Division has categorically rejected misleading interpretations of the National Electric Power Regulatory Authority’s (NEPRA) recent multi-year tariff determination for K-Electric, clarifying that the decision is in favour of Karachi’s electricity consumers — not against them.
A spokesperson of the Power Division stated that certain vested interests are distorting facts to falsely portray NEPRA’s determination as a setback for the people of Karachi. “The reality is quite the opposite,” the spokesperson said, adding that the decision strengthens consumer protection, ensures accountability, and prevents inefficiency-based profiteering.
The spokesperson highlighted that while K-Electric is a private entity expected to outperform public distribution companies, its performance still lags behind utilities such as IESCO, FESCO, and GEPCO in key areas including loss reduction, recovery, and service quality.
The NEPRA review, the spokesperson explained, primarily addresses K-Electric’s administrative and operational affairs. Presently, K-Electric draws around 2,000 MW from the national grid — a cheaper power source compared to its own generation plants. Consumers in Karachi already pay the same per-unit tariff as elsewhere in the country, and rationalization of K-Electric’s internal costs will help maintain uniform national tariffs rather than increase consumer rates.
The Power Division further clarified that subsidies will continue to benefit consumers, not corporate inefficiencies. “Public subsidies cannot be converted into private profits. Preventing this misuse is a national responsibility,” the spokesperson said.
Under the revised framework, K-Electric will no longer be allowed to pass unrecovered dues or inefficiency-related costs to consumers without verifiable proof. Only genuinely unrecoverable receivables will be considered by NEPRA, ensuring consumers are not burdened with arbitrary charges.
Significantly, NEPRA’s review also curtails K-Electric’s excessive profits. The previously allowed return of 24–30%, indexed to the US dollar, has now been delinked from foreign currency since K-Electric’s assets are rupee-denominated. Moreover, NEPRA has empowered authorities to renegotiate lower returns on K-Electric’s generation plants in line with national power sector reforms.
Citing findings from an independent consultant hired by K-Electric itself, the Power Division revealed that despite heavy expenditure, K-Electric failed to reduce losses — prompting NEPRA to lower the permissible loss benchmark to protect consumers.
Additionally, NEPRA has excluded non-operational K-Electric plants from tariff calculations, ensuring capacity charges from idle facilities are not unfairly imposed on consumers. This measure aligns with the federal government’s broader efforts to retire inefficient plants and reduce per-unit electricity costs nationwide.
The spokesperson termed NEPRA’s decision a “landmark reform,” emphasizing that it will foster long-term financial discipline, regulatory transparency, and consumer protection. “No utility will now be able to extract unverified profits from the public. K-Electric must focus on improving efficiency and service quality,” the spokesperson concluded.
With this review, taxpayers will be relieved of billions in unnecessary subsidies, while K-Electric will be compelled to enhance performance and minimize losses. The Power Division assured Karachi consumers that there is no threat of load-shedding, as ample and cheaper electricity is available through the national grid infrastructure.
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