K-Electric Chief Executive Officer Moonis Alvi has voiced concern over the National Electric Power Regulatory Authority’s (NEPRA) significant changes and reductions in the company’s multi-year tariff.
On Monday, NEPRA slashed the KE tariff by Rs7 per unit in response to a petition filed by the Power Division. The regulator also revised the losses target downward, which would further impact the company. NEPRA reviewed the government’s petition against its earlier decision and reduced the tariff from Rs39.97 per unit to Rs32 per unit.
Mr Alvi said the tariff announced in June this year followed two-and-a-half years of consultation, research, scrutiny, and verification of data from independent sources. He noted that the tariff, finalised after a lengthy process, has now been substantially altered within just a few months.
“K-Electric is reviewing how to continue operations in light of this revised tariff,” he said, warning that the sharp reduction could affect electricity consumers. While the company’s administration is making every effort to minimise the impact on consumers, Mr Alvi acknowledged that the reduced tariff will inevitably have some effect. He added that K-Electric’s management has briefed the board on the new tariff adjustments following NEPRA’s decision.
Earlier, on May 27, 2025, NEPRA had issued a decision raising the average base tariff for K-Electric by Rs6.15 per unit, an 18.18 percent increase, setting it at Rs39.97 per unit for the fiscal year 2023-24 under a newly approved multi-year tariff regime stretching to FY2030.
Despite the formal tariff approval, KE’s finances remain under severe pressure. With bill recovery slipping to 91.5 percent in FY2023-24 and projected to fall to 90.5 percent next year, the utility could face cumulative under-recoveries nearing Rs 97 billion over two fiscal years. NEPRA cautioned that KE’s permitted Rs21.6 billion return on distribution operations might be wiped out without government support or adjustments.
Now, NEPRA’s further cut of over Rs7.5 per unit may add to the company’s financial strain. KE sold 15 billion units in FY24, making the financial impact of the revised tariff more than Rs100 billion. While the tariff reduction is described as a saving for consumers, analysis suggests that KE consumers may not see any relief in their bills, as the entire “saving” goes to the federal government.
The revised tariff is effective from FY24 onwards, and the company is closely monitoring the situation to determine how to manage operations under the new conditions.