AT&C-based load shedding: No action against DISCOs & KE due to stay orders: Nepra

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has said that it is constrained from taking further regulatory action against distribution companies (DISCOs) and K-Electric (KE) over Aggregate Technical and Commercial (AT&C) losses-based load shedding due to stay orders granted by different appellate forums and superior courts.

The regulator reiterated that load shedding based on aggregate technical and commercial (AT&C) losses is not recognised under the applicable regulatory framework and cannot be used by DISCOs to penalise consumers regularly paying their electricity bills.

NEPRA took this position in comments submitted in response to recommendations of the National Assembly Standing Committee on Privatisation following its October 14, 2026 meeting.

READ ALSO: Load-shedding based on AT&C losses: Nepra slaps Rs0.1m daily fine on HESCO

According to NEPRA, Rule 4 of the Performance Standards (Distribution) Rules, 2005, provides for load shedding in accordance with system requirements and instructions of the National Grid Company (NGC), including plans to shed up to 30 per cent of connected load. However, the provision does not authorise DISCOs to independently introduce load shedding merely because particular feeders have high AT&C losses.

The regulator maintained that it had repeatedly held during enforcement proceedings against DISCOs that AT&C-based load shedding was inconsistent with the NEPRA Act and the Performance Standards (Distribution) Rules, 2005, and had never been recognised by the Authority.

NEPRA considers the practice discriminatory because consumers who regularly pay their electricity bills are deprived of electricity due to theft, non-payment and inefficiencies attributable to other consumers or the distribution company itself.

The Authority specifically observed that electricity theft, non-payment or high technical and commercial losses on a feeder do not justify depriving regularly paying consumers of electricity.

It has also rejected the argument that DISCO inefficiencies in managing transmission and distribution losses and recovering outstanding bills could provide a legitimate basis for AT&C-based load shedding.

According to the regulator, high AT&C losses represent a performance failure of the concerned DISCO rather than a justification for reducing electricity supply to an entire feeder.

The distribution companies are responsible for reducing technical losses, controlling electricity theft, improving metering and billing systems, strengthening recovery and initiating legal action against individual defaulters and those involved in electricity theft.

NEPRA has accordingly directed DISCOs to take effective measures for loss reduction and recovery instead of relying on load shedding as their principal response to high-loss feeders.

The regulator also questioned the financial rationale advanced by DISCOs for imposing load shedding on feeders with high losses. It pointed out that load shedding reduces electricity sales and recovery from affected feeders, potentially aggravating the financial position of distribution companies.

More importantly, where electricity generation is available under take-or-pay arrangements, reducing demand does not necessarily eliminate corresponding generation and capacity-related costs.

NEPRA observed that AT&C-based load shedding can therefore worsen the economics of the power sector by underutilising available generation while capacity-related payments continue to be incurred.

The Authority disclosed that it had initiated enforcement proceedings against Hyderabad Electric Supply Company (HESCO), Sukkur Electric Power Company (SEPCO), Quetta Electric Supply Company (QESCO), Peshawar Electric Supply Company (PESCO) and K-Electric over AT&C-based load shedding.

Following completion of due process, fines of Rs50 million were imposed on the respective companies for violations relating to AT&C-based load shedding.

In addition, recurring daily fines have been imposed on HESCO, SEPCO and QESCO for continued non-compliance with the regulator’s directions to discontinue AT&C-based load shedding.

However, the enforcement measures have faced legal challenges, with the concerned licensees approaching competent appellate forums and superior courts, including the NEPRA Appellate Tribunal and High Courts.

NEPRA stated that stay orders had been granted in certain cases, constraining its ability to proceed further against the concerned licensees on matters covered by judicial orders.

The Authority added that excessive load shedding had nevertheless continued to be reported by the concerned licensees during the pendency of litigation.

In view of the stay orders, NEPRA said its ability to undertake further regulatory action against the companies in respect of matters covered by such orders remained subject to directions of the respective courts.

The regulator, however, indicated that the Ministry of Energy’s Power Division was better placed to apprise the parliamentary committee of measures being taken to address continued load shedding and the timeframe for its elimination, particularly where such load shedding was being undertaken pursuant to Power Division directions.

The observations were submitted in connection with the National Assembly Standing Committee on Privatisation’s recommendations concerning unannounced load shedding and prolonged electricity interruptions.

The committee had expressed concern over unannounced load shedding and prolonged power outages and directed NEPRA and the Power Division, in coordination with the concerned DISCOs, to attend its next meeting.

It also called for compliance with prescribed load-shedding limits, corrective action against violations and a consolidated report detailing the causes, affected areas, duration and remedial measures taken.

The regulator’s position underscores the continuing legal and regulatory dispute over AT&C-based load shedding, with the enforcement of its directions against concerned DISCOs and KE now subject to judicial proceedings.

Copyright Business Recorder, 2026