The National Electric Power Regulatory Authority (Nepra) has imposed a Rs25 million fine on the Lahore Electric Supply Company (Lesco) for failing to reduce transmission and distribution (T&D) losses and improve recovery performance during fiscal year 2023–24 compared to the previous year.
According to Nepra, the penalty follows a review of the Circular Debt Report for June 2024 submitted by the Central Power Purchasing Agency–Guarantee (CPPA-G). The report showed that overall electricity purchases by distribution companies (DISCOs) fell by 1 percent to 115,142 gigawatt-hours (GWh) in FY24, while losses increased to 18.31 percent from 16.84 percent a year earlier.
The regulator noted that DISCOs collectively breached the allowed T&D loss target of 11.77 percent by 6.54 percent, contributing around Rs276 billion to the circular debt during FY24. This was despite an approved investment allocation of Rs163.1 billion for network improvement.
Lesco was identified as a key contributor to the overall increase in system losses. Its T&D losses rose to 15.92 percent in FY24 from 11.88 percent in FY23, pushing financial losses to Rs47.6 billion from Rs25.8 billion the previous year.
During the hearing, Lesco admitted to overbilling consumers in violation of the Nepra Consumer Service Manual. The company said its officers were unable to focus on operational performance because of ongoing inquiries by law enforcement agencies into excessive billing practices. Nepra said this admission confirmed the allegations outlined in its show-cause notice.
After reviewing the company’s response, the regulator concluded that Lesco failed to provide a satisfactory explanation for its poor performance and violations. Under the Nepra Fine Regulations 2021, the authority imposed a Rs25 million penalty on the utility for its failure to improve performance indicators.
