ISLAMABAD — In a significant regulatory move, the National Electric Power Regulatory Authority (NEPRA) has approved a Rs50.01 billion write-off for K-Electric (KE), clearing long-disputed receivables from its 2017–2023 Multi-Year Tariff (MYT) period. The decision provides long-awaited clarity to the utility’s financials but comes with a catch — any recovered amount must be passed back to consumers.
The ruling, issued Thursday, allows KE to treat the amount as “final and unrecoverable” after the company claimed the dues stem from chronic defaulters, despite repeated collection efforts. KE’s auditors supported the company’s assertion that these dues could not realistically be recovered.
However, NEPRA wasn’t fully convinced by all of KE’s arguments. Out of the Rs76.03 billion the company had claimed, the regulator disallowed Rs26 billion. It ruled that Rs24.34 billion of those claims predated July 2016 and fell under a different regulatory regime in which such losses were to be borne by KE itself — not passed on to consumers.
“Allowing these claims would have clearly duplicated costs already accounted for,” NEPRA stated in its decision.
Crucially, the regulator included a safeguard for consumers: if KE manages to recover any of the written-off amounts in the future, those funds must be returned to the public through quarterly adjustments in fuel price charges. KE will be required to provide annual auditor certificates verifying the status of any recoveries.
KE CEO Moonis Alvi welcomed the decision, saying it closes most outstanding issues from the previous tariff period. “KE looks forward to the MYT for FY24–FY30 and remains committed to meeting the growing energy needs of Karachi,” he said.
The decision also ends a long-standing regulatory dispute between KE and NEPRA, although the process hasn’t been without controversy. Political groups such as Jamaat-e-Islami and business community representatives in Karachi raised concerns during public hearings, accusing KE of inflating the claims and bundling “bogus bills” into the write-off — an allegation the company strongly denies.
Originally, KE applied for a 10-year MYT in 2016, but NEPRA granted a seven-year tariff framework, running from July 2016 to June 2023. Under the MYT model, the utility is allowed to claim some costs, including those deemed unrecoverable, provided they meet strict audit and regulatory requirements. These claims, however, do not directly affect the uniform tariff that end-users pay for electricity.
Privatised in 2005, K-Electric remains Pakistan’s only vertically integrated power utility, overseeing electricity generation, transmission, and distribution in Karachi and surrounding areas.
In a separate development, NEPRA also announced a Rs2.98 per unit refund for KE consumers in their June electricity bills, under the monthly fuel cost adjustment for electricity consumed in March.
The regulator recently concluded its review and approval of KE’s MYT frameworks for both its transmission & distribution and supply segments for FY2024 to FY2030 — setting the stage for the utility’s next chapter.