Distribution Investment Plan: Nepra approves Rs21.436bn for SEPCO
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved a Distribution Investment Plan (DIP) of Rs21.436 billion along with provisional Transmission and Distribution (T&D) loss targets for Sukkur Electric Power Company Limited (SEPCO) for its transmission and distribution business. The approval covers the Multi-Year Tariff (MYT) control period of five years, from FY 2025-26 to FY 2029-30.
Initially, SEPCO had sought Nepra’s approval for a significantly higher DIP of Rs90.563 billion. However, following a series of queries raised by the regulator, the company submitted revised information, ultimately reducing the proposed investment to Rs40.191 billion on June 19, 2026. The revised plan incorporated adjustments in investment priorities and network-strengthening requirements, aligned with updated demand projections. Project costs were also recalculated based on the latest Purchase Orders (POs).
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Nepra identified serious deficiencies in SEPCO’s initial submission, noting that it failed to reflect ground realities, lacked proper needs assessment, and included incomplete cost estimates and asset utilisation data. The authority stressed that future planning must be data-driven, realistic, and fully aligned with regulatory requirements.
Upon review, Nepra observed significant underutilisation of previously approved investments. Against an allowed investment of Rs39.509 billion, SEPCO utilised only Rs14.231 billion during the control period—approximately 36 percent. This low utilisation raised concerns regarding the company’s project execution capacity, implementation efficiency, and ability to effectively utilise regulatory approvals.
The regulator also highlighted delays in project execution, particularly under the STG (System Transition/Transmission Grid) head. These delays were attributed to land acquisition issues, procurement constraints, and weak interdepartmental coordination, indicating shortcomings in planning, milestone monitoring, and execution.
Nepra further noted that SEPCO’s technical and operational performance—especially T&D losses and reliability indices such as SAIFI and SAIDI—requires substantial improvement. The company has been directed to strengthen preventive maintenance, improve energy accounting systems, and enhance system controls to ensure operational efficiency and a reliable power supply.
The Authority acknowledged that SEPCO’s investment priorities include expansion of the 132 kV network, system augmentation to meet future demand, and adoption of modern technologies such as Advanced Metering Infrastructure (AMI), SCADA systems, and GIS-based mapping. These initiatives are aimed at improving service quality, safety, and operational performance.
In a key directive, Nepra has made it mandatory for SEPCO to engage an independent third-party consultant to validate future investment plans prior to submission. The company has also been instructed to prepare comprehensive Terms of Reference (ToRs) for approval before initiating procurement.
Additionally, the regulator directed SEPCO to digitise its operational data, emphasising that reliance on manual systems leads to inefficiencies, errors, and weak decision-making. Nepra underscored the need for a fully integrated digital system to enable real-time monitoring, accurate demand forecasting, and evidence-based planning.
To ensure flexibility, Nepra has adopted a dynamic framework for the approved DIP, allowing annual adjustments and mid-term reviews. SEPCO has been directed to submit a mid-term review by December 2027, detailing updated demand forecasts, project progress, and financial performance. Meanwhile, Nepra has approved provisional T&D loss targets of 16.31 percent, including a 1 percent allowance for law and order conditions, for FY 2025-26 and FY 2026-27. The authority has also directed SEPCO to conduct an independent third-party study of T&D losses through an international consultant or consortium within nine months, effective from January 7, 2026 (tariff rebasing decision). In case SEPCO fails to submit the required study within the stipulated timeframe, the regulator will apply benchmark loss levels, including 5.32 percent HT losses, 1.85 percent LT losses, total distribution losses of 7.17 percent, transmission losses of 1.00 percent, and an overall technical loss cap of 8 to 10 percent.
Copyright Business Recorder, 2026