KE seeks SIFC support to resolve ICP issue
K-Electric's dispute with the Power Division and Nepra over the Incremental Consumption Package's financial impact has reached the SIFC, seeking resolution for significant losses and business confidence.
- KE's financial losses from the Incremental Consumption Package.
- Discrepancies in Nepra's Incremental Consumption Package determinations.
- High-level efforts to resolve the K-Electric payment dispute.
ISLAMABAD: The dispute between K-Electric (KE), the Power Division and the National Electric Power Regulatory Authority (Nepra) over the financial impact of the Incremental Consumption Package (ICP) for industrial consumers has reportedly landed at the Special Investment Facilitation Council (SIFC), well-informed sources in KE told Business Recorder.
The issue relates to the government’s ICP, introduced in November 2020 to stimulate industrial growth and encourage higher electricity consumption. KE implemented the package from November 2020 to June 2021 in accordance with Nepra’s determination issued on December 1, 2020.
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The government subsequently extended the ICP from July 2021 to October 2023.
However, according to KE, the corresponding Nepra determination materially departed from the first determination and was inconsistent with the company’s Multi-Year Tariff (MYT) framework for 2017-2023.
In a letter to SIFC, KE stated that under its MYT for FY2017-23, its sales target was locked on the basis of an assumed sent-out growth rate of 4.5 percent CAGR, with the risk of under- or over-achievement of sales resting with the company.
The actual growth during the control period, however, remained around 1.5 percent CAGR, mainly due to factors beyond KE’s control, resulting in a financial loss of around Rs39 billion, the company maintained.
KE further argued that implementation of the disputed Nepra determination would reduce actual growth to around 1.3 percent CAGR because of the exclusion of incremental units, increasing the financial impact on the utility by another Rs4 billion.
According to KE, unlike its MYT 2017-23, the tariff framework applicable to WAPDA Distribution Companies (WDISCOs) allows the impact of actual sent-out to be passed through in tariffs. Consequently, WDISCOs do not bear a financial loss arising from exclusion of incremental units supplied at marginal cost.
KE therefore sought legal recourse, first before the Nepra Appellate Tribunal and subsequently before the Islamabad High Court, where the matter remains sub judice and a stay order continues to be in force.
The company has also maintained that the disputed determination carries significant financial implications for both KE and the federal government, particularly in relation to associated subsidy requirements.
The issue has been discussed at several high-level forums, including the SIFC, with participation from key stakeholders, including representatives of the industrial sector, KE said.
During these deliberations, KE, Nepra and the Power Division were directed to reconcile their respective calculations to establish a common basis for resolving the dispute.
Following the reconciliation exercise, a recent meeting concluded that the Power Division would present a proposal aimed at facilitating further discussions and developing a mutually acceptable way forward.
KE has now sought the support of the Power Division and SIFC to bring all relevant stakeholders together for an equitable and amicable resolution of the longstanding dispute.
The company argued that resolution of the matter was critical to maintaining business confidence, supporting industrial competitiveness and safeguarding the broader interests of both KE and the Government of Pakistan.
Copyright Business Recorder, 2026