Power Division welcomes NEPRA’s review of K-Electric tariff

KARACHI: Spokesperson of Power Division has welcomed the review decision of NEPRA in the K-Electric Multi-Year Tariff, being a landmark decision for the people of Karachi.

The Spokesperson said that the Power Division is proud of filling in a timely, merit-based review in the case.

The spokesperson said that some circles are spreading negative propaganda based on misinformation to misrepresent NEPRA’s review of K-Electric’s Multi-Year Tariff (MYT), portraying a regulatory correction as a fiscal maneuver or consumer burden.

In reality, the Authority’s determinations were guided purely by principles of equity, consistency, and sectoral sustainability.

The review was conducted to align the K-Electric tariff framework with those applicable to other Transmission and Distribution companies.

NEPRA’s review eliminated tariff elements inconsistent with national regulatory standards, including foreign currency–indexed returns, loss allowances, etc. NEPRA’s review removed these, ensuring all utilities are regulated under the same principles of cost recovery, efficiency, and transparency.

Return on Equity (RoE): Converted from USD-based to PKR-based, T&D Losses are rationalized, allowing of working capital as per requirement, etc. These measures rectify structural imbalances, not reduce legitimate recoveries.

The circles’ claim that NEPRA’s decision deprives Karachi consumers of any “relief” fundamentally misunderstands how electricity tariffs are applied in Pakistan.

K-Electric’s Multi-Year Tariff (MYT) pertains to the company’s internal revenue requirements, not the consumer-end tariff.

Consumer tariffs across all distribution companies, including K-Electric, are determined and notified by the Government of Pakistan under the national uniform tariff policy.

Equally misplaced is the suggestion that the decision represents a “reallocation” of resources or that the government has “unplugged Rs 7 per unit in subsidy” that it had been giving to electricity consumers of Karachi or to divert elsewhere.

The subsidy to K-Electric consumers is still in place under a uniform tariff. The interpretation that this constitutes a subsidy diversion reflects a misunderstanding of fiscal fundamentals.

A reduction in subsidy is not a diversion of funds; it simply lessens fiscal expenditure that would otherwise burden the national budget.

NEPRA’s review strengthens regulatory neutrality, and the decision reflected its independent self-review jurisdiction, not under any governmental directive, reaffirming institutional autonomy and commitment to public interest.