ISLAMABAD: The federal government and Karachi-based consumer groups on Tuesday strongly opposed K-Electric’s claims of nearly Rs60 billion under End-of-Term (EoT) adjustments for the Multi-Year Tariff (MYT) control period 2017-23 during a public hearing held by the National Electric Power Regulatory Authority (Nepra).
At the conclusion of the hearing, Nepra stated that K-Electric’s petition for EoT adjustments falls within the framework approved under the MYT determination for FY2017-23 and the subsequent mid-term review mechanism. However, the regulator stopped short of issuing a final verdict on the utility’s claims.
According to Nepra, the adjustment mechanisms were already incorporated into the approved tariff structure and envisaged specific components to be reviewed at the end of the control period through a prescribed regulatory process.
During the proceedings, K-Electric sought cumulative EoT adjustments amounting to Rs43.6 billion. The claims include the impact of exchange rate fluctuations on the allowed Return on Equity (RoE), investment-related adjustments, and working capital actualisation based on actual financial balances compared to projected benchmarks approved under the MYT framework.
KE’s Senior Director Finance, Ayaz Amir, also requested approval of an additional Rs18.5bn in pass-through claims related to taxes paid by the company, arguing that the claims were fully aligned with Nepra’s tariff determinations.
Representing the federal government, Additional Secretary Power Division Mehfooz Bhatti challenged the claims, terming them excessive and calling for their rationalisation based on detailed financial assessments submitted by the Power Division. He further argued that working capital costs claimed by the utility should be revised downward.
Meanwhile, representatives of Karachi’s industrial and consumer sectors, including Rehan Javed and Tanveer Barry, criticised K-Electric for aggressively pursuing backdated claims while allegedly withholding payments owed to consumers.
They pointed out that nearly Rs32bn determined by Nepra under the clawback mechanism remained tied up in thousands of court cases over several years, depriving consumers of relief.
The industrial representatives urged Nepra not to shift the financial burden either onto Karachi consumers through higher electricity tariffs or onto taxpayers via additional government subsidies.
They also expressed concerns over K-Electric’s operational and investment outlook, claiming the utility was facing equipment shortages, while Saudi investors had exited and potential Chinese investors had reportedly withdrawn interest in the company.
Story by Khaleeq Kiani
