National Electric Power Regulatory Authority (Nepra) has notified K-Electric’s long-awaited multi-year tariffs for supply, distribution, and transmission through 2030, despite an unresolved review motion from the federal government.
As per media reports, the Nepra has approved a Rs6.15 per unit increase in K-Electric’s base tariff. While the government maintains a uniform tariff across the country and provides subsidies for KE consumers, Nepra proceeded with the notification, asserting that no legal barrier prevented the implementation.
Now the approved average tariff for KE customers stands at Rs39.97 per kilowatt-hour for FY 2023-24, which includes Rs31.96 for power purchase costs, Rs2.86 for transmission, Rs3.31 for distribution, and Rs2.28 for the supply margin. A prior year adjustment of Rs-0.44/kWh is also included.
The move was made under enhanced powers granted by a 2021 amendment, which allows Nepra to issue tariff notifications directly, a responsibility that previously rested with the federal government.
This decision comes amid pressure from international lenders, such as the IMF and World Bank, who have urged Pakistan to streamline tariff-setting and push forward with necessary power sector reforms.
Nepra emphasised that without these changes, KE’s financial viability could be jeopardised, potentially impacting the broader energy market and consumers.
Nepra has projected KE’s revenue requirement for FY 2023-24 at Rs606.9 billion, with portions allocated to supply margin and recovery losses. However, the utility’s financial stability remains under threat, with bill recovery slipping to 91.5% in FY 2023-24 and further decline expected next year. Without government support or tariff adjustments, KE faces under-recoveries of up to Rs97 billion over two years.
The government has expressed concerns over the approval, claiming that the utility is unfairly granted Rs750 billion in benefits over the next seven years, which it argues will place an undue financial burden on consumers. The government has called for a review of the decision to ensure fairness and prevent inefficiencies from being subsidized.
