ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has rejected the review motion filed by Multan Electric Power Company (MEPCO) against its Multi-Year Tariff (MYT) determination for the period FY2025-26 to FY2029-30.
NEPRA had earlier determined MEPCO’s MYT for a five-year control period, separately for its distribution and supply functions, through determinations issued on January 7, 2026. These tariffs were subsequently notified by the federal government via an SRO dated January 13, 2026.
Aggrieved by the determinations, MEPCO filed Motions for Leave for Review (MLRs), which were admitted by the Authority. A public hearing on the matter was held on March 5, 2026, with notices issued to key stakeholders, including the Ministry of Energy (Power Division), Independent System and Market Operator (ISMO), Power Planning and Monitoring Company (PPMC), and Central Power Purchasing Agency Guarantee Limited (CPPA-G).
READ MORE: Nepra approves Rs35.514bn 4-year ‘DIP’ for MEPCO
In its submissions, MEPCO challenged several aspects of the determinations, primarily citing insufficient investment allowances for FY2025-26 and FY2026-27, inadequate operations and maintenance (O&M) expense approvals, and a mismatch between revenue requirements, investment levels, and transmission and distribution (T&D) loss targets.
The utility argued that although it had timely submitted its Distribution Investment Plan (DIP) for the MYT period, NEPRA had provisionally approved significantly reduced investment figures, excluding key technological interventions. MEPCO maintained that the approved investment level was inadequate to meet operational, financial, and system expansion needs, particularly given its large network and consumer base of approximately 8.8 million.
Highlighting its operational performance, MEPCO informed the Authority that it had reduced T&D losses from 15.2 percent to 13.3 percent during FY2024-25, saving approximately 358 GWh and generating financial gains of Rs9.8 billion. Recovery performance also improved from 98.62 percent to over 100 percent, yielding additional gains of Rs11.8 billion. Overall, the company reported cumulative efficiency gains of Rs21.6 billion.
To sustain this performance, MEPCO proposed a revised investment plan of Rs119.022 billion for the five-year period, covering system strengthening, rehabilitation, transformer augmentation, Advanced Metering Infrastructure (AMI), Automated Power Management Systems (APMS), ERP systems, data centers, GIS mapping, and anti-theft measures.
The company emphasised that investments in meter replacement (Rs41.7 billion), APMS (Rs11.96 billion), AMI expansion (Rs7.07 billion), and a centralised data center (Rs3.77 billion) were critical for improving transparency, operational efficiency, and customer service. It also argued that these initiatives aligned with government-backed reforms and donor-funded programs, including those supported by the World Bank and other development partners.
MEPCO further warned that delays or disallowances in foreign-funded projects could result in financial losses, commitment charges, and reputational risks. It also pointed out that donor conditions prohibit the use of old or spare transformers, necessitating additional investments.
The utility also raised concerns over disparities in approved investment levels among distribution companies (DISCOs), noting that despite serving a larger consumer base and demonstrating better performance, it was allocated significantly lower investment compared to entities such as K-Electric, IESCO, FESCO, LESCO, and GEPCO.
Additionally, MEPCO sought the introduction of a “Z-Factor” mechanism to account for extraordinary costs arising from natural disasters, citing recent flood damage that necessitated replacement of over 60,000 meters.
On the issue of mismatch between financial year-based investment approvals and calendar year-based revenue determination, MEPCO requested clarity on the rebasing methodology. However, NEPRA noted that the company itself had requested tariff rebasing on a calendar year basis and termed the concern inconsistent. Nonetheless, the Authority agreed to hold a separate session with DISCOs to explain the methodology and future data requirements.
After detailed consideration, NEPRA concluded that there was no justification to review its earlier determinations and rejected MEPCO’s review motions. The decision has been forwarded to the federal government for notification in the official Gazette under Section 31(7) of the NEPRA Act.
Copyright Business Recorder, 2026
Comments