KARACHI: K-Electric (KE) has expressed serious concern over the National Electric Power Regulatory Authority’s (Nepra) recent decision that slashed its average tariff by Rs7.6 per kilowatt-hour (kWh) — from Rs39.97/kWh to Rs32.37/kWh — following a review of multiple motions filed under the utility’s multi-year tariff (MYT) determinations.
In a statement issued on Tuesday, KE said the decision would have “far-reaching consequences for its stakeholders, including consumers”, though it clarified that the revision does not translate into any immediate change in electricity bills for end users.
Nepra’s order pertains to KE’s MYT for the control period FY 2024–30, covering determinations for generation plants, transmission, and distribution networks, as well as investment plans and loss assessments. While the regulator upheld its earlier stance on KE’s write-off claims, it significantly altered other determinations, which KE described as “unsustainable”.
The power utility said it is reviewing Nepra’s decision in detail and will explore all available legal and regulatory remedies.
The authority’s notification — available with Dawn.com — stated that Nepra had revised the fuel cost references for FY 2023–24 and directed KE to file revised fuel cost adjustment claims for the same period. It maintained earlier positions on several contentious issues, including operation and maintenance costs, late payment surcharges, and recovery losses, rejecting KE’s requests for leniency.
Nepra also disallowed any upfront recovery losses to prevent transferring the utility’s inefficiencies to consumers or the federal exchequer, noting that KE’s tariff will be based on 100% recovery targets.
Under the new framework, KE’s permissible write-off limits will gradually decline from 3.5% in FY 2023–24 to 1% by FY 2029–30. The regulator further reaffirmed its revenue-cap approach over the previously applied price-cap model, citing no justification for a reversal.
Nepra’s decision follows its May 27 determination setting KE’s base tariff at Rs39.97 per unit — nearly 40% higher than the national average tariff of Rs28 per unit applicable to public-sector power distribution companies. The difference had been subsidized through the federal budget, prompting review petitions from multiple stakeholders.
Story by Tahir Sherani
