NEPRA concludes public hearing on K-Electric's write-off claims

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has concluded its hearing on K-Electric’s annual claims of unrecoverable dues against chronic defaulters, ARY News reported on Tuesday.

During the hearing, consumers raised multiple grievances on K-Electric’s right-of-claims between FY17 and FY23, highlighting severe challenges faced by Karachi’s residents and businesses.

K-Electric said in a statement that it is allowed to claim these costs in the Multi-Year Tariff awarded to the utility, which is independent of the rates of electricity charged to customers in monthly bills under the uniform tariff policy.

K-Electric elaborated further that the Rs68 billion amount discussed in the hearing has accumulated over a 7-year period which is critical to the company’s continued financial sustainability.

“These amounts have been unrecoverable despite best efforts against defaulters including multiple disconnections, engagement with specialized recovery agencies, and area-specific initiatives,” the statement said.

KE asserted that “the submissions to NEPRA have also undergone strict internal scrutiny as well as external audits by well-accredited and renowned audit firm as required by the NEPRA Authority”.

Speaking on the occasion, Spokesperson K-Electric stated, “Unlike DISCOs, as a private utility KE has no contribution to the national circular debt, a fact that has been recognized by the World Bank and renowned global institutions”.

The spokesperson urged that “disallowing legitimate claims will therefore directly impact KE’s cashflows, affecting our capacity to fulfill plans to drive infrastructural upgrades for enhanced power supply to Karachi.”

K-Electric further said that it will continue to actively engage with the regulator on this matter.

During the hearing, consumers lamented that operating businesses in Karachi has become increasingly difficult due to high electricity costs.

“Hundreds of factories have already shut down, and many more are on the verge of closure due to unaffordable power rates,” one consumer stated.

It was pointed out that Karachi’s electricity users are being burdened with surcharges intended to reduce the circular debt. “We categorically reject any additional burden in the form of right-of-claims or other charges,” said another consumer.