The National Electric Power Regulatory Authority (NEPRA) has announced a significant K-Electric tariff reduction, cutting the company’s multi-year base rate from Rs. 39.97 per unit to Rs. 32 per unit. This decision comes after reviewing the government’s petition against NEPRA’s earlier determination.
Despite the revision, NEPRA maintained its stance on key matters, rejecting the government’s appeal to reverse K-Electric’s Rs. 50 billion write-off approval. The regulator stated that the petitioners failed to present convincing arguments to change the earlier verdict.
This marks a major turnaround from NEPRA’s May 2025 decision, which had increased KE’s average base tariff by Rs. 6.15 per unit (an 18.18% rise) for FY2023-24. The new revision delivers a financial setback to K-Electric, whose bill recovery rate has already fallen to 91.5% and may drop to 90.5% next year — potentially causing Rs 97 billion in losses over two years.
NEPRA warned that KE’s approved Rs 21.6 billion return on distribution could disappear without government backing or new tariff adjustments. The authority also introduced strict efficiency goals, setting a 0.75% annual transmission loss limit and reducing total distribution losses to 9%, gradually declining to 8.03% by FY2029-30.
Additionally, NEPRA decided to continue using Pakistan’s National Consumer Price Index (N-CPI) for fuel cost indexation instead of the US CPI, linking tariff changes directly to domestic inflation.
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The K-Electric tariff reduction offers some relief to consumers but poses serious profitability challenges for the utility. KE now faces the tough task of improving efficiency to survive under the new, tighter financial framework.
