ISLAMABAD: A spokesperson of the Power Division has welcomed Nepra’s review decision in the K-Electric Multi Year Tariff, being a landmark mark decision for the people of Karachi.
In a statement, the spokesperson said the Power Division is proud of filing in-time merit based review in the case.
“Some circles are spreading negative propaganda based on misinformation to misrepresent Nepra’s review of K-Electric’s Multi-Year Tariff (MYT), portraying a regulatory correction as a fiscal maneuver or consumer burden. In reality, the Authority’s determinations were guided purely by principles of equity, consistency, and sectoral sustainability,” the spokesperson added.
Tariff cut: KE sees consequences for stakeholders, consumers
According to the Power Division, the review was conducted to align K-Electric tariff framework with those applicable to other Transmission and Distribution companies. Nepra’s review eliminated tariff elements inconsistent with national regulatory standards, including foreign currency–indexed returns, loss allowances, etc. Nepra’s review removed these, ensuring all utilities are regulated under the same principles of cost recovery, efficiency, and transparency.
Return on Equity (RoE): Converted from USD-based to PKR-based, T&D Losses are rationalized, allowing of working capital as per requirement, etc. These measures rectify structural imbalances, not reduce legitimate recoveries.
Some circles claim that Nepra’s decision deprives Karachi consumers of any “relief” fundamentally misunderstands how electricity tariffs are applied in Pakistan. K-Electric’s Multi-Year Tariff (MYT) pertains to the company’s internal revenue requirements, not the consumer-end tariff. Consumer tariffs across all distribution companies, including K-Electric, are determined and notified by the Government of Pakistan under the national uniform tariff policy.
“Equally misplaced is the suggestion that the decision represents a “reallocation” of resources or that the government has “unplugged Rs 7 per unit in subsidy” that it had been giving to electricity consumers of Karachi or to divert elsewhere. The subsidy to K-electric consumers is still in place under uniform tariff.
The interpretation that this constitutes a subsidy diversion reflects a misunderstanding of fiscal fundamentals. A reduction in subsidy is not a diversion of funds; it simply lessens fiscal expenditure that would otherwise burden the national budget, the spokesperson continued.
“Nepra’s review strengthens regulatory neutrality, and the decision reflected its independent self-review jurisdiction, not under any governmental directive, reaffirming institutional autonomy and commitment to public interest,” he concluded.
Copyright Business Recorder, 2025
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