Nepra’s decisions on KE tariffs: Power Div. flags potential consumers harm, urges revision

ISLAMABAD: The Power Division on Wednesday announced plans to file reviews of the National Electric Power Regulatory Authority’s recent decisions regarding K-Electric tariffs, warning that parts of the rulings could have negative consequences for consumers if not revised.

Power Minister Sardar Awais Khan Leghari took to X (formerly Twitter) to express concerns about Nepra’s decisions announced during the last few days that have drawn strong reactions from the ministry.

The minister’s remarks came at a time when Nepra, which by law is the power sector regulator, feels helpless in implementing its directions issued to Power Division and its affiliated organizations.

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Last month, during a public hearing on IEECO’s Multi-Year Tariff petition , Member (Tech) Rafique Ahmad Shaikh, asked Power Division to get rid of Chief Executive Officer (CEO), for poor performance. Similar positions were seen in other Discos and NTDC, which irritated the Authority during public hearings.

“The Ministry has serious concerns regarding Nepra’s multiple determinations related to K-Electric’s licenses for generation, transmission, distribution, and supply. These decisions also impact the investment plan for the upcoming multi-year tariff period,” said the Power Minister.

Leghari emphasized that the rulings have significant long-term implications for consumer tariffs and the Federal Government’s subsidy framework under the uniform tariff regime.

“The ministry is preparing to seek a review of the recent determinations concerning transmission, distribution, and supply. Additionally, the reconsideration of an earlier generation tariff decision — submitted back in December 2024—still awaits Nepra’s attention. This delay poses serious financial risks for the power sector and its associated subsidies,” he added.

The minister further cautioned that unresolved issues within Nepra’s rulings could negatively affect consumers and the broader regulatory environment, potentially deterring private sector investment in the distribution sector.

According to a power sector expert, Nepra’s annual recovery loss allowance of Rs 40 billion granted to K-Electric—totaling over Rs 320 billion across seven years. Another insider sarcastically stated that “Minister seems super happy on Nepra’s determinations”.

Another expert stated that real challenge is rampant power theft and non-recovery of electricity bills in the country. On the governance side, however, the proposed bill to classify electricity theft as a criminal offense was recently rejected by lawmakers.

As a result, Discos are left with no option but to recover their legitimate business costs from paying consumers — a practice observed across the country. Power Division wants to review Nepra’s recent tariff determinations for K-Electric, consumers across Pakistan, including those in Karachi, already burdened with the PHL surcharge due to the continued non-recovery of dues from other government-owned Discos.

The Nepra’s determinations on KE Multi-Year Tariff petitions are actually removing such disparities currently present in Pakistan’s power sector. Also, unlike KE previous multiyear tariff for 2017-23, there is a periodic review mechanism built in the tariff for the period 2023-30.

Copyright Business Recorder, 2025