ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved five-year Distribution Investment Plans (2025–2029) worth Rs77.443 billion for three power distribution companies, significantly reducing their originally proposed investments by about 39%.
The approved plans cover Gujranwala Electric Power Company (Gepco), Quetta Electric Supply Company (Qesco), and Tribal Areas Electric Supply Company (Tesco), against a combined demand of approximately Rs127 billion. The regulator emphasized a cautious and disciplined approach, subjecting all proposals to rigorous technical, financial, and prudency evaluations.
Gepco, which initially sought Rs100.612 billion and later revised it to Rs85.301 billion, was ultimately approved Rs48.013 billion after detailed scrutiny. Similarly, Qesco reduced its proposal from Rs51.577 billion to Rs28.950 billion, while Tesco revised its plan from Rs14.229 billion to Rs13.692 billion. Nepra approved Rs7.841 billion for Tesco, maintaining strict cost rationalisation across the board.
The regulator clarified that these approved figures are indicative and will serve as provisional benchmarks for tariff determination, with final adjustments subject to further review during tariff proceedings.
A major focus of the determinations is loss reduction and operational efficiency. For Gepco, Nepra has set transmission loss targets at 0.92% and technical losses at 8.85% for FY2025-26 and FY2026-27. The utility has been directed to conduct an independent third-party study on transmission and distribution (T&D) losses within nine months from July 1, 2026, through an internationally reputed consultant.
Nepra has also introduced strict compliance measures. Failure to complete the study within the stipulated timeframe will result in tighter loss reduction targets, with financial implications to be incorporated in future tariff adjustments.
The authority directed all three Discos to prioritise timely execution of approved projects to enhance system reliability and reduce losses. Limited flexibility has been allowed for undertaking alternative projects, capped at 5% of total approved projects under the System Augmentation Programme, without exceeding the overall financial ceiling.
On the financial side, duties and taxes will be treated on an actual basis, subject to proper documentation. A contingency allowance of up to 3% of total project cost has also been permitted, strictly for unforeseen risks—not inefficiencies or scope changes.
Nepra further outlined a structured cost adjustment mechanism, linking the Foreign Cost Component (FCC) to exchange rate fluctuations and the Local Cost Component (LCC) to the National Consumer Price Index (NCPI), applicable only within approved timelines.
In a push toward modernisation, the regulator has allowed Discos to replace faulty meters with static or Advanced Metering Infrastructure (AMI) systems. Priority will be given to high-load connections and areas with existing communication infrastructure. All AMI deployments must comply with international standards such as DLMS/COSEM and UDIL, and integrate with a centralised Meter Data Management System (MDMS).
The determinations signal Nepra’s continued focus on financial discipline, efficiency, and modernisation of Pakistan’s power distribution network.
Story by Mushtaq Ghumman
