Dealing a significant setback to K-Electric\u2019s financial position, the National Electric Power Regulatory Authority (Nepra) has reduced the utility\u2019s multi-year base tariff from Rs39.97 per unit to Rs32 per unit after evaluating the government\u2019s review petition on its earlier decision. Despite the tariff cut, Nepra upheld its previous stance on crucial matters, dismissing the Power Division\u2019s request to revoke K-Electric\u2019s Rs50 billion write-off claims. The regulator reiterated that the write-offs had already been approved in an earlier order, leaving no grounds for reversal. \u201cThe Petitioners have failed to convince the Authority for the desired modifications or review; hence, the review motions stand dismissed,\u201d Nepra stated in its verdict. This downward revision comes as a sharp turnaround from Nepra\u2019s determination on May 27, 2025, which had approved an 18.18% hike \u2014 raising KE\u2019s average base tariff by Rs6.15 per unit to Rs39.97 per unit for FY2023-24. That decision was formally notified on July 18, 2025, setting the multi-year tariff framework for KE\u2019s generation, transmission, and distribution operations through FY2030. The Power Division, however, later challenged the determination and filed a review petition, leading to closed-door hearings at Nepra. Despite the recent adjustments, K-Electric\u2019s financial outlook remains strained. According to the regulator, KE\u2019s bill recovery rate dropped to 91.5% in FY2023-24 and could decline further to 90.5% next year \u2014 potentially causing revenue shortfalls of nearly Rs97 billion over the two years. Nepra has also cautioned that the company\u2019s allowed Rs21.6 billion return on distribution operations may be wiped out unless the government extends financial support or revises tariffs. In the latest order, the regulator introduced new performance benchmarks for the seven-year control period, setting transmission loss targets at 0.75% per annum \u2014 down from 0.86% in FY2023-24 \u2014 with an upper cap of 1%. Future tariff adjustments will be tied to annual performance, offering incentives for improved efficiency. For distribution, Nepra approved a total loss target of 9% comprising 8% technical losses and 1% allowance for law and order issues, based on the PITCO Fitchner study. This is expected to decline gradually to 8.03% by FY2029-30, with technical losses shrinking to 7.03%. The existing 75:25 sharing mechanism for over-performance will remain in place meaning 75% of any efficiency gains will benefit consumers, while KE will retain 25% as an incentive. Nepra also reaffirmed its decision to use Pakistan’s National Consumer Price Index (N-CPI) for fuel cost indexation instead of the US CPI, aligning tariff adjustments with domestic inflation trends to improve transparency and consistency.<\/p>\n","protected":false},"excerpt":{"rendered":"
Dealing a significant setback to K-Electric\u2019s financial position, the National Electric Power Regulatory Authority (Nepra) has reduced the utility\u2019s multi-year base tariff from Rs39.97 per…<\/p>\n","protected":false},"author":1,"featured_media":28464,"comment_status":"registered_only","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[16],"tags":[],"class_list":["post-28463","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"aioseo_notices":[],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=\/wp\/v2\/posts\/28463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=28463"}],"version-history":[{"count":0,"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=\/wp\/v2\/posts\/28463\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=\/wp\/v2\/media\/28464"}],"wp:attachment":[{"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.diplomacypakistan.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}