ISLAMABAD:The Power Division has requested the National Electric Power Regulatory Authority (NEPRA) to defer the approval of a Rs4.69 per unit relief in electricity bills for K-Electric consumers under the April 2025 monthly Fuel Charges Adjustment (FCA).
However, NEPRA’s legal team has advised against accepting the request without formal instructions from the federal cabinet.
The public hearing, presided over by NEPRA Chairman Waseem Mukhtar, was held on K-Electric’s application seeking a reduction of Rs4.69 per unit in April’s FCA. During the proceedings, NEPRA officials stated that if the reduction were approved, consumers would collectively receive a relief of Rs7.17 billion.
The Power Division argued that the subsidy required to implement this relief would need to be covered by the federal budget. Officials also stated that, from July 1, 2025, the government plans to implement a uniform tariff policy nationwide, under which Rs125 billion has been allocated for K-Electric subsidies.
Chairman Mukhtar sought legal clarity from NEPRA’s legal experts, who strongly opposed the Power Division’s request. They maintained that the NEPRA Act does not permit withholding FCA relief unless there are explicit instructions from the federal cabinet—none of which currently exist.
Chairman Mukhtar remarked that if the Power Division intended to block the FCA relief, it should have presented formal legal grounds in consultation with the Ministry of Law.
K-Electric CEO Moonis Alvi stated that the authority to approve FCA relief lies solely with NEPRA, and that the company would fully comply with the regulator’s final decision.
During the hearing, several Karachi-based consumers voiced frustration, noting that while the Power Division remained silent during periods of rising fuel costs, it was now attempting to delay legitimate relief. They demanded that the relief be passed on without political interference.
The Power Division has come under public criticism for attempting to stall the FCA relief for Karachi. Participants in NEPRA’s hearing expressed strong opposition to what they described as unwarranted interference by the Ministry of Energy.
The Ministry’s last-minute request to delay the hearing—pending a Cabinet decision on a proposed uniform FCA policy—came despite the absence of any formal stay and followed two prior deferrals since the original hearing date of June 18.
K-Electric has been seeking a negative adjustment of Rs4.69 per kilowatt-hour, potentially offering around Rs7.17 billion in relief to Karachi’s electricity consumers.
At the outset of the hearing, Power Division officials again requested NEPRA to postpone its decision for 10–15 days until the Cabinet finalises a broader subsidy framework aimed at keeping quarterly tariff adjustments (QTA) and monthly FCAs consistent across all DISCOs and K-Electric. They argued that approving the Rs4.69/unit refund now would create a Rs125 billion shortfall in the subsidy budget and overburden taxpayers if the uniform tariff policy is approved retroactively.
Chairman Waseem Mukhtar reminded the Ministry that FCA is a formula-based, automatic pass-through mechanism mandated under Section 31 of the NEPRA Act. “No stay order from any competent forum exists,” he said. He also noted that other distribution companies routinely pass on FCAs with a two-month lag and questioned how a Cabinet decision could apply retroactively once July bills are issued. Any delay in a statutory process, he stressed, must follow due legal process.
Presenting for K-Electric, CEO Moonis Alvi stated that the utility had complied with all procedural requirements and that delaying the relief would strain its working capital without yielding any savings for the government. He reiterated that K-Electric would abide by NEPRA’s decision but stressed that regulatory certainty is critical for industrialists and investors who rely on transparent pricing. “A moving target undermines confidence across the sector and hinders future planning,” he said.
Industrial stakeholders—including representatives from the Korangi Association of Trade & Industry (KATI) and energy analyst Arif Balwani—urged immediate approval of the relief. They argued that the Power Division had never raised objections when FCAs resulted in higher charges and that Karachi’s consumers should not be penalised now that the formula works in their favour. They also cited the Supreme Court’s 2014 ruling affirming NEPRA’s exclusive jurisdiction over tariff adjustments, warning that executive interference undermines investor confidence and violates the principle of separation of powers.
NEPRA Member Amina Ahmed questioned the Ministry’s sudden intervention in the FCA process, noting that the reference used by K-Electric had been in place for two years without prior objections from the Ministry during multiple interim determinations.
“The Ministry has now woken up from a slumber and is asking us to pause,” she said. “If there had been any input earlier, it could have informed the reference being used. But until today, no policy guidelines for FCA have been issued. So, the question is — when do you plan to provide them, and how long must we wait?”
In response, a representative from the Power Division said the Cabinet required 10 to 15 more days for approval, adding that comments from relevant stakeholders had already been submitted for review.
NEPRA concluded the hearing and has reserved its decision, which will be announced following further data verification and scrutiny.
