ISLAMABAD — The National Electric Power Regulatory Authority (NEPRA) has allowed K-Electric (KE) to write off Rs50.01 billion as unrecoverable dues related to the Multi-Year Tariff (MYT) control period of FY2017–FY2023, while rejecting Rs26 billion worth of additional claims as pertaining to an earlier regulatory framework.
In its detailed order issued Thursday, NEPRA approved the amount as KE’s “full and final claim” out of the total Rs76.03 billion requested by the utility. The approved write-offs relate to long-outstanding bills from chronic defaulters, which KE had argued were impossible to recover despite best efforts, a position supported by the company’s auditors.
However, NEPRA emphasised that in the event KE recovers any of the written-off amounts in the future, the gains must be passed back to consumers through immediate adjustments in quarterly fuel price mechanisms. “The authority directs KE to continue pursuing recovery… and to submit annual certificates from its auditors confirming the status of such recoveries,” the order stated.
The regulator flatly rejected Rs24.34 billion of the claimed amount, noting that this portion pertained to the MYT period before July 1, 2016, and was governed by a performance-based framework in which losses were to be borne by KE. Allowing these would have constituted “a clear duplication of cost,” NEPRA ruled.
The decision resolves one of the longstanding disputes between the utility and the regulator. KE CEO Moonis Alvi welcomed the order, stating, “With this decision, majority of items pending to the previous control period have come to a close. KE looks forward to the MYT for FY24–FY30, committed to meeting its serviced territory’s energy needs.”
During the public hearings on the case, several stakeholders including Jamaat-e-Islami and Karachi’s business representatives had raised concerns over the size of the claims and alleged irregular billing practices. JI argued that “bogus bills” had been bundled into the write-off request, a claim KE has denied.
KE had initially filed its MYT application in March 2016 for a 10-year period. However, the regulator granted a seven-year MYT spanning July 2016 to June 2023 in its 2017 decision. The write-offs relate to receivables accrued during this control period.
The MYT framework allows KE to claim some of its costs, including those deemed unrecoverable from chronic defaulters, provided these meet predefined audit and regulatory criteria. These costs are part of the overall financial sustainability model for the utility but do not directly impact the uniform electricity tariff charged to end-consumers.
Privatised in 2005, K-Electric is Pakistan’s only vertically integrated utility, responsible for generation, transmission, and distribution of power in Karachi and its surrounding areas.
Separately, NEPRA on Thursday also notified a Rs2.98 per unit refund for KE consumers in their June electricity bills under the monthly fuel cost adjustment (FCA) mechanism for electricity consumed in March.
Last month, NEPRA concluded its review of KE’s new MYT for its transmission and distribution (T&D) segments for FY2024 to FY2030, later also approving the utility’s MYT for its electricity supply segment.
