Islamabad: Pakistan’s power distribution system is incurring annual losses exceeding Rs1 trillion due to high transmission and distribution (T&D) losses and poor bill recoveries, according to the latest Performance Evaluation Report of Distribution Companies for FY2024-25 issued by the National Electric Power Regulatory Authority.
The report highlights persistent structural and operational weaknesses within the power sector, including elevated T&D losses, weak billing and recovery performance, frequent load-shedding, delays in new connections, and serious safety lapses.
Nepra noted that ex-Wapda distribution companies (Discos) collectively recorded T&D losses of 17.55 percent and unrecovered billing of around 3.5 percent during FY25. This translated into approximately Rs910 billion worth of electricity lost within the distribution network. When losses from K-Electric are included, the cumulative financial impact surpasses Rs1 trillion.
The regulator observed that despite some improvements in specific operational areas, enduring challenges such as high technical losses, weak revenue recovery, and unreliable system operations continue to undermine efficiency and service quality. These inefficiencies are also contributing significantly to the mounting circular debt crisis in the power sector.
The report further criticised the government’s policy of revenue-based load-shedding, stating that it has failed to deliver the intended results and has instead aggravated financial imbalances.
Safety performance also deteriorated during the year under review. A total of 118 fatalities were reported across various distribution companies, including 38 employees and 80 members of the public. The Islamabad Electric Supply Company (Iesco) recorded the highest number of incidents, followed by Peshawar Electric Supply Company (Pesco), K-Electric and Hyderabad Electric Supply Company (Hesco). These utilities attributed several accidents to consumer negligence and incidents occurring on private premises.
No distribution company met its assigned technical loss targets during FY25, resulting in an estimated additional financial burden of Rs265 billion on the sector. The largest contributors to this shortfall were Pesco (Rs87.48bn), Quetta Electric Supply Company (Qesco) (Rs52.41bn), Sukkur Electric Power Company (Sepco) (Rs36.04bn), and Lahore Electric Supply Company (Lesco) (Rs35.17bn).
Nepra concluded that without decisive structural reforms, improved governance, and enhanced accountability mechanisms, Pakistan’s power sector will continue to face financial instability, declining service standards, and escalating circular debt — posing a serious challenge to the country’s economic sustainability.
Story by Khaleeq Kiani
