NEPRA slashes K-Electric tariff to Rs32 per unit after review petition
In a major blow to K-Electric’s financial position, the National Electric Power Regulatory Authority (NEPRA) has cut the utility’s multi-year tariff to Rs32 per unit from the earlier determined Rs39.97, following a government petition seeking a review of the regulator’s July decision.
The authority, however, upheld its earlier rulings on key issues — rejecting the review portioners’ plea seeking to NEPRA approval to disallow Rs50 billion write-off. “The petitioners have failed to convince the Authority to bring desired alteration or review, thus, the review motions are accordingly dismissed,” NEPRA stated in its order.
The new determination marks a significant revision to NEPRA’s July 18, 2025, decision, which had raised KE’s average base tariff by Rs6.15 per unit for FY2023–24 under a long-delayed multi-year framework stretching to FY2030. However, later the Power Division challenged it and filed a review petition before the NEPRA. On it petitions, the regulator recently held closed-door proceedings for three days.
Industry analysts warn that the Rs7.5 per unit cut could worsen KE’s already fragile finances, with the company’s bill recovery slipping to 91.5 percent last year and expected to fall further. Cumulative under-recoveries may now exceed Rs97 billion over two years, potentially erasing the utility’s Rs21.6 billion allowed return on distribution operations.
NEPRA also approved new efficiency benchmarks for KE’s seven-year investment plan, setting an annual transmission loss ceiling of 1 percent and a total distribution loss target of 9 percent, including a 1 percent allowance for law and order challenges.
To incentivize performance, NEPRA retained the 75:25 gain-sharing rule between consumers and KE for loss reductions, while directing that domestic CPI — not the U.S. index — be used for fuel cost adjustments to ensure pricing transparency.
