KARACHI – Some relief for residents of Pakistan’s financial capital as National Electric Power Regulatory Authority (Nepra) slashed K-Electric’s base tariff from Rs39.97 per unit to Rs32.
The decision comes after review of government petition challenging Nepra’s earlier tariff hike. While tariff cut hits K-Electric’s revenues hard, Nepra stood firm on its approval of the company’s Rs50 billion write-off claims, rejecting demands to reverse them. “The petitioners failed to provide convincing grounds for review; therefore, the motions are dismissed,” the regulator stated.
The reduction in power tariff reverses major 18pc tariff hike approved just months ago, leaving K-Electric facing grim financial outlook. Bill recovery rates fell to 91.5% last year and could drop to 90.5% in the next, risking under-recoveries of nearly Rs97 billion over two years. Nepra warned that the utility’s Rs21.6 billion allowed return on distribution could vanish without government support.
Efficiency targets were tightened as transmission losses capped at 0.75%, distribution losses targeted at 9%, and a 75:25 gain-sharing formula stays in place, giving consumers the lion’s share of any improvements. Fuel costs will now follow Pakistan’s National CPI, keeping tariff adjustments in line with local inflation.
K-Electric now faces a critical challenge on balancing operations while safeguarding its financial survival amid regulatory pressures.
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