LESCO misses Nepra targets despite reported savings, loss reduction claims

The Lahore Electric Supply Company (LESCO) has fallen short of performance benchmarks set by the National Electric Power Regulatory Authority (Nepra), despite reporting gains in loss reduction and recoveries, according to regulatory documents, Business Recorder reported. 

LESCO has highlighted improvements, including a reduction in transmission and distribution (T&D) losses, Rs35 billion savings from loss control, Rs23 billion recovery gains and efficiencies in Advanced Metering Infrastructure (AMI) procurement. However, Nepra’s Multi-Year Tariff (MYT) determination, State of Industry Report 2025, and Performance Evaluation Report 2024-25 indicate that key targets have not been met.

LESCO reported reducing T&D losses from 15.8% to 13.4%, but Nepra benchmarks required losses to fall to 10% in FY2023-24 and 9.46% in FY2024-25. Actual losses stood at 15.92% and 13.7% during these years, exceeding allowed limits.

The shortfall resulted in a financial impact of Rs39.4 billion in FY2023-24 and Rs35.17 billion in FY2024-25, according to Nepra data. Analysts said the reported savings reflect partial improvements rather than compliance with regulatory targets.

In October 2025, Nepra imposed a Rs25 million penalty on LESCO for excessive losses, indicating non-compliance with performance standards.

LESCO reported a Rs23 billion improvement in recoveries and near 100% year-end recovery rates. However, Nepra noted continued fluctuations in recovery ratios, accumulation of receivables and limited reduction in overdue amounts.

Sector-wide data in the State of Industry Report 2025 shows that circular debt and receivables remain unresolved, suggesting recovery gains are incremental.

The company has also cited projected savings of Rs60–70 billion from AMI meters, but experts said these remain unverified until full implementation and operational results are available.

Under Nepra’s MYT framework, utilities are assessed across multiple indicators, including loss reduction, recoveries, operational efficiency, investment discipline and service quality. Observers noted that LESCO’s reporting focuses on selected financial metrics while omitting broader performance indicators.

Reliability indicators also remain above targets. The System Average Interruption Frequency Index (SAIFI) stands at 28.16 against a target of 13, while the System Average Interruption Duration Index (SAIDI) is 2,982.94 minutes compared to an allowed 14 minutes.

Nepra’s report also highlighted delays in new connections, high fault rates and weak complaint handling. As of June 2025, around 28,984 connections were pending, while fault rates per kilometre were the highest among distribution companies.

Analysts said that while losses have declined from 15.92% to 13.4%, sustained improvement and compliance with single-digit targets remain necessary to meet regulatory standards.