ISLAMABAD: K-Electric continued to receive good news as the national power regulator — Nepra — allowed it a Rs50 billion write-off of unrecovered past bills, with a subsequent additional impact on paying consumers and taxpayers in the form of budgetary and tariff adjustments.
In addition, the regulator also allowed it to retain Rs2.74bn fuel cost overcharged to consumers in March and share partial benefit with consumers with a refund Rs4.05bn, out of a total monthly fuel cost saving of Rs6.79bn.
The KE consumers would thus get Rs2.99 per unit negative fuel cost adjustments (FCA) in the current month bills while the private power utility would mop up Rs2.03 per unit for its past claims against partial loan, open cycle operations and degradation for July 2023-March 2025 period.
On the other hand, the regulator notified about 94 paise per unit additional fuel cost recovery instead of a demand of Rs1.27 from consumers of public sector Distribution Companies (Discos) on higher electricity consumed in March.
Allows Discos 94 paise hike in tariff for March
Earlier, on May 27, the National Electric Power Regulatory Authority approved a major policy departure, allowing KE to build, on average, 5pc unrecoverable bills into its consumer tariff. The tariff, set at Rs40 per unit for FY24, is indexed to inflation and exchange rate variations for the subsequent six years, ending in 2029-30.
The Power Division later termed undue favour to the power utility worth around Rs750bn over seven years and announced it would challenge the decision on at least six counts.
Under the previous MYT of 2017-23, the KE has demanded a write-off the claim of Rs76bn, built over a period of seven years since FY17 based on a tariff determination of 2018 that allowed about 1.69pc provision for recovery losses. The Nepra “hereby approves Rs50.013bn on account of writeoffs pertaining to the billing of MYT 2017-23 for K-Electric as full and final claim”, the regulator said in its determination sent to the power division for notification.
The Rs50bn would either be made part of KE’s tariff or paid off the federal budget against the tariff differential subsidy (TDS), depending on the government’s decision. The regulator stated that the law empowered the Power Division to notify the decision in the Gazette of Pakistan within 30 days, failing which the regulator would notify its own decision.
KE cheers decision
“With this decision, the majority of items pending the previous control period have come to a close. KE looks forward to the MYT for the control period spanning FY24 to FY30, committed to meeting its serviced territory’s energy needs,” said KE Chief Executive Officer Syed Moonis Abdullah Alvi.
Separately, Nepra also notified negative FCA of Rs5.02 per unit with a financial impact of Rs6.792bn for March 2025 as proposed by KE. However, KE had claimed an amount of Rs15.2bn, on account of partial load, open cycle and degradation curves along with startup cost for the period from July 2023 to March 2025. It had requested the regulator not to pass on full negative FCA to consumers and make partial adjustments against these claims.
Published in Dawn, June 6th, 2025
