Power division rejects claims of subsidy withdrawal for K-Electric consumers

ISLAMABAD: The Power Division has termed the recent review of K-Electric’s tariff a “significant milestone” for the people of Karachi, emphasizing that the review was filed on time and based purely on merit, ARY News reported.

In a statement, the division said certain quarters are presenting NEPRA’s decision in a misleading manner, whereas the authority’s determination is founded on the principles of equality, stability, and transparency. It clarified that the tariff framework for K-Electric has been aligned with the standards applied to other power distribution companies across the country.

The Power Division noted that NEPRA has abolished the provision allowing profits and losses linked to foreign currency fluctuations. From now on, all distribution companies (DISCOs) will be regulated under uniform standards of performance, recovery, and transparency.

The ministry explained that the review is not a reduction in legitimate recovery but part of a structural correction process. It rejected the impression that NEPRA’s decision deprives Karachi consumers of any “relief,” stating that the multi-year tariff system pertains solely to the company’s revenue requirements, not consumer tariffs.

It reiterated that consumer tariffs are determined by the Government of Pakistan under the national uniform tariff policy, and that reports of a Rs7-per-unit subsidy withdrawal are “incorrect and misleading.” The Power Division stressed that subsidies for K-Electric consumers continue under the uniform tariff policy, while any reduction merely reflects a decrease in budgetary burden rather than a withdrawal of funds.

The statement further underscored that NEPRA’s review reflects the regulator’s independence and impartiality. “The decision was made within NEPRA’s autonomous jurisdiction, not under any government directive,” the Power Division affirmed.

Earlier, the National Electric Power Regulatory Authority (NEPRA) reduced K-Electric’s (KE) average base tariff by Rs7.6 per unit — from Rs39.97 to Rs32.37 per unit — following a detailed review of the company’s Multi-Year Tariff (MYT) for FY2024–FY2030.

The decision came on a petition filed by the Power Division, along with multiple review motions regarding earlier MYT determinations.

The revised determination covers several aspects, including KE’s generation, transmission, distribution, and supply businesses; the Transmission and Distribution Investment Plan and Losses Assessment for FY2024–FY2030; and write-off claims for MYT 2017–2023.

NEPRA upheld its earlier stance on KE’s Rs50 billion write-off claims but made amendments in several tariff-related areas.