Islamabad — The National Electric Power Regulatory Authority (NEPRA) has approved a Distribution Investment Plan (DIP) worth Rs42.577 billion for Peshawar Electric Supply Company (PESCO) for the 2025–2029 period, substantially lower than the utility’s original and revised investment proposals.
PESCO had initially submitted its DIP to NEPRA on February 27, 2025, for the Multi-Year Tariff (MYT) control period covering FY2025-26 to FY2029-30, proposing total investments of Rs123.808 billion. The company planned to finance the projects through internal resources and borrowings after approval from its Board of Directors.
The proposed investment plan aimed to improve the reliability, stability, safety, and efficiency of the power distribution network while addressing growing electricity demand across its service territory.
Key objectives of the plan included strengthening and expanding the 132kV transmission network, improving interconnection with the national grid, expanding transmission and distribution infrastructure, reducing transmission and distribution (T&D) losses, enhancing system safety and reliability, and implementing administrative and commercial reforms.
The plan also proposed the deployment of Advanced Metering Infrastructure (AMI), SCADA systems, Enterprise Resource Planning (ERP) solutions, Geographic Information System (GIS) mapping, and other modernisation initiatives in line with regulatory directives.
However, after a detailed review, NEPRA observed that the submitted investment plan did not accurately reflect the actual operational conditions of PESCO’s network. The Authority noted that several grid stations and transmission and distribution assets were already underutilised or operating below optimal capacity.
NEPRA warned that approving the investment plan in its original form could further increase asset underutilisation and ultimately place an unnecessary financial burden on electricity consumers through higher tariffs.
The regulator also identified several shortcomings in the proposal, including weak needs assessment, inadequate cost-benefit analysis, missing Bills of Quantities (BoQs), insufficient evaluation of tariff impacts, and limited alignment with regulatory frameworks such as the Grid Code, Distribution Code, Performance Standards Rules, and Planning Guidelines.
According to NEPRA, better planning, accurate demand forecasting, improved engineering design, and optimal use of existing infrastructure could significantly reduce the required investment without compromising system reliability or operational security.
Following NEPRA’s observations, PESCO revised its proposed investment downward to Rs77.558 billion. However, after further scrutiny, the regulator approved only Rs42.577 billion for the five-year period.
The Authority also approved a total T&D loss target of 19.26 percent for FY2025-26 and FY2026-27.
NEPRA stated that the review process for the DIP was conducted through a structured and consultative mechanism to ensure transparency, technical soundness, and efficient utilisation of national resources.
The regulator reiterated that future investment plans submitted by distribution companies must be realistic, data-driven, and aligned with actual system requirements to avoid unnecessary expenditure and tariff increases.
It further observed that PESCO’s original submission appeared overstated and lacked critical planning elements, including detailed needs assessments, comprehensive cost estimates, Bills of Quantities, and proper evaluation of existing asset utilisation.
NEPRA directed PESCO to prioritise the implementation of projects approved under the DIP. However, the Authority acknowledged that unforeseen operational requirements may arise during the approved investment period, allowing the utility to undertake alternative projects with proper justification and regulatory approval.
Story by Mushtaq Ghumman
