The National Electric Power Regulatory Authority (NEPRA) has completed a public hearing on major financial claims submitted by K-Electric under its Multi-Year Tariff (MYT) framework for FY2017–2023. The total amount under consideration exceeds Rs58 billion and includes tariff adjustments, tax-related recoveries, and pending power purchase costs.
The hearing focused on K-Electric’s request for End-of-Term Adjustments (EoTA), which the utility says are allowed under the tariff structure previously approved by the regulator. According to the company, these adjustments are necessary to account for financial changes that occurred during the control period.
Breakdown of K-Electric’s Claims
K-Electric informed NEPRA that its cumulative EoTA claims stand at approximately Rs43.6 billion. These claims mainly relate to exchange rate fluctuations affecting the company’s approved Return on Equity (RoE), investment-related revisions, and working capital adjustments based on actual financial figures compared to earlier projections.
The company argued that the MYT framework already included mechanisms for adjusting uncontrollable financial factors such as currency depreciation and investment variations.
In addition to the EoTA amount, K-Electric also requested approval for Rs15.3 billion in tax-related pass-through claims. These include:
- Rs7.5 billion in taxes paid during 2023
- Rs3 billion in additional tax liabilities for 2022
- Rs4.1 billion linked to minimum tax adjustments from 2018 to 2021
The utility further sought recovery of:
- Rs461 million under Workers’ Welfare Fund (WWF) and Workers’ Profit Participation Fund (WPPF)
- Rs261 million in pending power purchase costs from electricity bought from independent power producers
Additional Claims Submitted
During the hearing, K-Electric also referred to an additional submission made on July 7, 2025. In that filing, the company requested another Rs10.963 billion in pending tax adjustments, WPPF claims, and power purchase cost recoveries under the same MYT framework.
The company maintained that all claims strictly follow the methodologies and adjustment formulas already approved by NEPRA in earlier tariff determinations.
Impact on Consumers and the Power Sector
The outcome of this case could have significant implications for electricity consumers, especially in Karachi and other areas served by K-Electric. If NEPRA approves the claims, some of the unrecovered costs may eventually become part of future electricity tariffs.
The hearing also highlights the broader challenges faced by Pakistan’s energy sector, including exchange rate pressures, rising operational costs, and delayed financial recoveries.
K-Electric requested the regulator to incorporate these pending recoveries and verified claims into tariff schedules under the new MYT period starting from July 1, 2023.
Decision Still Pending
After hearing arguments from K-Electric and other stakeholders, NEPRA concluded the proceedings and reserved its verdict. The regulator is expected to issue a final decision after reviewing all submitted details and objections.
The ruling will likely play an important role in shaping future tariff structures and regulatory treatment of cost adjustments in Pakistan’s power sector.