Nepra approves Rs42.577bn DIP for PESCO for 2025–2029

ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has approved a Distribution Investment Plan (DIP) worth Rs42.577 billion for Peshawar Electric Supply Company (PESCO) for 2025–2029, significantly lower than both the original and revised proposals submitted by the utility.

In compliance with regulatory requirements, PESCO submitted its DIP on February 27, 2025, for the Multi-Year Tariff (MYT) control period from FY2025-26 to FY2029-30, proposing a total investment of Rs123.808 billion.

The plan was to be financed through the company’s own resources and borrowings and had been approved by PESCO’s Board of Directors.

The proposed DIP aimed to enhance the reliability, stability, safety, and efficiency of the distribution system while meeting growing electricity demand. Key objectives included: (i) strengthening and expanding the 132 kV transmission network to ensure reliable and constraint-free power supply; (ii) improving interconnection with the National Grid; (iii) expanding transmission and distribution infrastructure to meet future load requirements; (iv) reducing transmission and distribution (T&D) losses and improving service quality; (v) enhancing safety, reliability, and capacity building; and (vi) undertaking administrative and commercial improvements, including metering and IT development, along with implementation of Advanced Metering Infrastructure (AMI), SCADA systems, ERP solutions, GIS mapping, and other initiatives as directed by the Authority.

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However, during its evaluation, NEPRA observed that the submitted plan did not adequately reflect the actual operational conditions of the network. Several grid stations and T&D assets were found to be underutilized or operating below optimal capacity. The Authority cautioned that approving the plan in its original form could further exacerbate asset underutilization and lead to higher consumer tariffs.

NEPRA also identified several gaps in the submission, including deficiencies in needs assessment, cost-benefit analysis, provision of Bills of Quantities (BoQs), evaluation of tariff impact, and alignment with regulatory frameworks such as the Grid Code, Distribution Code, Performance Standards Rules, and Planning Guidelines.

The Authority emphasized that improved planning, better engineering design, accurate demand forecasting, and optimal utilization of existing infrastructure could significantly reduce the overall investment requirement without compromising system reliability or security.

Subsequently, PESCO revised its proposed investment downward to Rs77.558 billion. However, NEPRA approved a much lower amount of Rs42.577 billion after detailed scrutiny.

The Authority also approved a total T&D loss target of 19.26 percent for FY2025-26 and FY2026-27.

NEPRA stated that it adopted a structured and consultative review process to ensure a transparent, comprehensive, and technically sound evaluation of the DIP.

The regulator reiterated that investment plans must be realistic, data-driven, and aligned with actual system requirements to ensure efficient utilization of national resources. It further noted that PESCO’s initial submission was overstated and lacked key components, including proper needs assessment, detailed cost estimates, BoQs, and a clear picture of existing asset utilization.

DISCO will, as a matter of priority, implement projects that have been approved by the Authority under the DIP. However, recognizing the potential for unforeseen circumstances and operational exigencies during the DIP firm approval period, the DISCO may, with due justification, undertake alternative projects not included in the approved DIP.

Copyright Business Recorder, 2026