The National Electric Power Regulatory Authority (NEPRA)’s recent multi-year tariff (MYT) review for K‑Electric (KE) is not detrimental to power consumers in Karachi, the Power Division has asserted in an official response.
According to the statement, some groups are mischaracterising the decision in order to sow confusion — when in fact the review is designed to strengthen transparency, uphold accountability and safeguard consumer interests.
The Power Division emphasised that K-Electric, as a private utility, needs to outperform the state-run distribution companies (DISCOs) — such as IESCO, FESCO and GEPCO — in key metrics including recoveries, line losses and consumer service.
The review highlights that K-Electric currently buys roughly 2,000 megawatts from the national grid — at costs lower than what its own generating plants incur — and has the scope to increase such purchases.
Crucially, the Power Division noted that K-Electric’s consumers pay the same per-unit rates as users elsewhere in Pakistan. Subsidies from the government continue to apply to KE customers, but going forward, taxpayer funds will no longer cover inefficiencies or losses within KE’s operations. The review will only allow for unrecoverable, verified losses to be recovered via tariffs.
The regulator has also capped K-Electric’s return on equity (previously 24-30 % with a US-dollar link), removed the dollar link, and mandated the retirement of idle generation plants — all intended to lower fixed costs and block unjustified pass-throughs to consumers.
Described as a “milestone in regulatory reform,” the move is expected to benefit Karachi’s electricity consumers by reducing the burden on taxpayers, encouraging loss reduction, ensuring equal treatment between K-Electric and state DISCOs, and maintaining grid stability without increased load-shedding.
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