K-Electric has warned that the tariff revisions proposed by the Power Division could lead to an annual financial loss of Rs100 billion, endangering its financial stability and Karachi’s energy security, BR reported.
In a letter dated October 7 to the Secretary Power — with copies sent to the finance minister and senior officials of the National Electric Power Regulatory Authority (NEPRA) — KE Chairman Mark Gerard Skelton and CFO Aamir Ghaziani said the proposed tariff adjustments would have “severe financial implications” for the utility.
The letter, issued two days before NEPRA’s hearing, followed a week of discussions on review motions and reconsideration requests filed by the Power Division challenging KE’s multi-year tariffs for FY2024–30 and its write-off decisions for FY2017–23.
KE officials said detailed discussions were held between September 29 and October 3 with representatives from the Power Division, the Central Power Purchasing Agency (CPPA-G), and the Pakistan Power Management Company (PPMC).
The utility rejected claims by a Power Division representative that the proposed revisions would not affect KE’s cash flow. It stated that each rupee cut in its tariff would reduce recoverable revenue by Rs15 billion, undermining operational sustainability.
KE warned that the proposed tariff cuts would transform projected earnings of Rs4 billion for FY2024 into a loss exceeding Rs100 billion. The company said this would push it from an EBITDA-positive position to an operating deficit and jeopardise its ability to meet investment and service obligations.
KE requested a meeting with the Power Division secretary to present financial data and discuss the matter, stressing the need for a “balanced decision” that protects both Karachi’s energy security and the power sector’s financial stability.
