Nepra flags Rs 265 billion T&D loss in FY25, calls for DISCOs restructuring, end to AT&C policy

In its Performance Evaluation Report for FY 2024-25, the National Electric Power Regulatory Authority has reported Rs 265 billion in transmission and distribution losses for FY 2024-25 and recommended structural reforms, including splitting large distribution companies into smaller units, accelerating privatization and phasing out the AT&C-based load shedding policy.

The power regulator said none of the distribution companies met the prescribed T&D loss targets despite repeated directives. The highest loss contributions were recorded by PESCO at Rs 87.48 billion, QESCO at Rs 52.41 billion, SEPCO at Rs 36.04 billion and LESCO at Rs 35.17 billion.

K-Electric reported a T&D loss of 14.73% against a target of 14.27%. Its revised targets of 0.75% transmission loss and 8.80% distribution loss remain unnotified and are under adjudication before the Sindh High Court.

On recoveries, IESCO, GEPCO, FESCO, LESCO and MEPCO achieved 100% recovery rates, while PESCO and K-Electric maintained over 90%. HESCO and SEPCO posted recovery rates of 74.80% and 74.20%, respectively, while QESCO recorded the lowest at 38.7%, contributing to an estimated Rs 132 billion financial impact. K-Electric’s unrecovered amount stood at Rs 74.6 billion at a 90.56% recovery ratio.

Nepra said most DISCOs failed to meet reliability standards measured through SAIFI and SAIDI indices. All companies missed SAIDI targets.

On new connections, 128,096 eligible consumers were awaiting connections as of June 2025 despite payment. MEPCO and K-Electric failed to connect 13–14% of applicants within the required timeframe.

The regulator also raised concerns over continued load shedding despite sufficient power allocation. Legal action was initiated against PESCO, QESCO, HESCO, SEPCO and K-Electric, with initial fines of Rs 50 million each and additional daily fines of Rs 100,000 on SEPCO and HESCO. Some orders are under appeal.

DISCOs recorded 7.42 million complaints during the year, with reporting disparities noted. Safety performance deteriorated, with 118 fatalities, including 38 employees and 80 members of the public.

Nepra said addressing structural inefficiencies requires governance reforms, technological upgrades, improved accountability and a shift away from the AT&C-based load shedding mechanism introduced in 2013.