Tribunal backs Nepra as K-Electric loses Rs32.37 tariff fight

An appellate tribunal in Islamabad has rejected K-Electric’s challenge to the National Electric Power Regulatory Authority’s revised tariff decision, upholding an average base tariff of Rs32.37 per unit for the power utility.

A three-member tribunal announced its verbal order on Wednesday, dismissing the appeals K-Electric filed against Nepra’s revised multi-year tariff determination for FY24 to FY30. The written order is yet to be issued.

Nepra had originally determined K-Electric’s tariff at Rs39.97 per unit before revising it down by Rs7.60 — a 19 per cent cut — to Rs32.37 in October last year on review petitions filed by the power division, Jamaat-i-Islami, Karachi-based industrialists and the company itself. K-Electric had challenged the revision in the Sindh High Court, secured a stay, and the matter was later referred to Nepra’s Appellate Tribunal as the appropriate forum.

The revised determination cut K-Electric’s effective rate of return to around 13–14 per cent from 22–23 per cent and is expected to reduce the government’s subsidy burden by almost Rs200 billion over the seven-year period. Nepra subsequently issued four interrelated gazette notifications.

Nepra clarified that K-Electric’s consumers will not be charged the tariff determined by the regulator; instead, they will continue to pay the uniform tariff applicable to other distribution companies, in line with the federal government’s August 22, 2023 policy guidelines under the National Electricity Policy, 2021.

A K-Electric spokesperson said the company awaits the detailed tribunal order, after which it will consider all legal remedies available to it. The company described the revised tariff as financially unsustainable.