ISLAMABAD: K-Electric (KE) has stated that neither the Power Division’s Review Motion is maintainable nor is the Central Power Purchasing Agency–Guaranteed (CPP-G) an affected party entitled to institute or continue the proceedings, sources close to the NEPRA Registrar told Newzshewz.
In a letter to the NEPRA Registrar on September 29, 2025, submitted prior to hearings held without media presence, KE’s Chief Financial Officer (CFO), Aamir Ghaziani, said that following a preliminary examination of documents/ details —and without prejudice to the company’s right to submit detailed responses to individual petitions—it is asserted that the review motions filed by parties other than KE are prima facie not maintainable and require a comprehensive and carefully prepared defence.
According to the CFO, in many instances the company has not been provided with authenticated copies of the impugned review motions, thereby violating a basic requirement of due process. These fundamental legal objections, he maintained, undermine and invalidate the review proceedings and call into question significant procedural errors and irregularities that must be addressed or rectified before the proceedings can lawfully commence under the NEPRA legal framework.
KE submitted that: (i) most of the parties that have instituted the Impugned Review Motions, including but not limited to the Central Power Purchasing Agency (Guarantee) Limited (“CPPA-G”), were neither parties to the original proceedings nor admitted as interveners, and therefore lack the locus standi to seek a review at this stage. Reference has also been made to Regulation 3(1)(d) of the National Electric Power Regulatory Authority (Review Procedure) Regulations, 2009 (inserted through SRO 1036(1)/2014 of November 19, 2014), the operative section reproduced hereunder for convenience of clarity:
“A party to any order or decision of NEPRA or a person who participated in the proceedings for tariff determination as an ‘intervener’.”
In view of the reproduced provision of the NEPRA (Review Procedure) Regulations, 2009, KE clarified that only those parties/persons who fall within the definition of parties as elucidated hereinabove may submit a motion for review pursuant to the NEPRA (Review Procedure) Regulations, 2009, read along with all other enabling provisions of the NEPRA legal framework. In the instant matter, the parties to the proceedings have taken umbrage with the subject decisions of the NEPRA Authority despite not having been part of the original proceedings (despite issuance of public notices) that would entitle them to seek a review. In the absence of such entitlement, the Impugned Review Motions are liable to be dismissed as being non-maintainable.
KE was of the view that the function of the CPPA-G is limited to agent of DISCOs and administer/manage the legacy contracts and hence is not a related or affected party to institute or continue the instant proceedings.
The Impugned Review Motions also attempt to introduce substantive and fresh grounds that fall entirely outside the narrow and exceptional scope of review permitted under the law, thereby converting the review process into a de facto appeal-which is impermissible and in any case that would fall within the scope and ambit of Section 12G(1) of the NEPRA Act, 1997 wherein the remedy of appeal is available to the applicant / parties before the NEPRA Appellate Tribunal. Thus, under the garb of review, grounds for appeal have been presented.
Reference has also been made to Regulation 3(2) of the NEPRA (Review Procedure) Regulations, 2009, reproduced hereunder for ease of clarity:
“Any party aggrieved from any order of the Authority and who, from the discovery of new and important matter of evidence or on account of some mistake or error apparent on the face of the record or from any other sufficient reasons, may file a motion seeking review of such order.”
KE further stated that as evident from the reproduced provision of the aforesaid regulations, a review may be entertained upon submission of new and important evidence, on the occurrence of some mistake or error apparent, and for other “sufficient reasons” which, pursuant to the principles of ejusdem generis, suggests that the sufficient reasons must be of the same ilk as the foregoing justifications. However, the Impugned Review Motions filed by various parties, such as CPPA-G, and Power Division, amongst others, raise numerous issues that are neither based on new evidence nor constitute errors apparent on the record.
This is more particularly alarming when the CPPA-G was not party in the original proceedings and how it can come to a determination that certain aspects were non-read or misread or mistake of fact or law has taken place. Instead, they seek to re-argue substantive aspects of the tariff determination(s), such as: (a) CPPA-G contends that the NEPRA Authority used a provisional, outdated benchmark instead of officially determined rates, creating an artificial financial burden. This is a challenge to the NEPRA Authority’s discretionary choice of a benchmark based on the
specific circumstances of KE’s case, and is not an error apparent on the record; (b) CPPA-G argues that the unexplained shift is a fundamental error that removes performance-based incentives. This is a fundamental disagreement with the chosen regulatory model, a core decision made by the NEPRA Authority after considering stakeholder submissions and constitutes a substantive appeal on merits; (c) CPPA-G challenges the 13.90% distribution loss allowance as unfairly high and critiques the 25% sharing mechanism for efficiency gains. This directly challenges the NEPRA’s technical assessment of a justified loss level and its calibrated incentive structure, which are quintessential substantive determinations. There is once again no error apparent on the face of the record ;(d) CPPA-G further challenges the Return on Equity (RoE) methodology, O&M cost-sharing mechanisms, and working capital allowances which is a challenge on the merits; (e) alongside the foregoing, the Ministry of Energy (Power Division) contends that granting a US-dollar-based RoE is unfair and inconsistent because KE’s business operates in local currency, resulting in an excessively high return. This is not an error apparent on the record but a fundamental challenge to a deliberate regulatory decision. The NEPRA Authority, in its determination, consciously adopted this basis after evaluating various factors, including investment incentives and capital structure and given the ultimate foreign shareholding. The Ministry of Energy’s (Power Division) objection is not a reviewable error; (f) The Power Division argues that delaying the application of the O&M efficiency incentive (the X-Factor) for two years and implementing a 50:50 savings sharing mechanism reduces incentives for efficiency. This is a direct challenge to the NEPRA Authority’s calibrated approach to introducing efficiency targets, a complex judgment based on transitioning a utility to a new tariff regime. The Power Division is essentially asking for a re-weighing of the evidence, reappraisal of evidence and a different policy outcome, which is the hallmark of an appeal, not a review. Additionally, there is no clarity as to whether the Ministry of Energy (Power Division) has filed the review with or without a decision of the Federal Cabinet as required by the Mustafa Impex judgment ; (g) Muhammad Arif’s contentions regarding demand forecasts, CAPEX approvals, and working capital, etc. are all subjects of the merits and substantive facts and cannot be impugned in the review proceedings; Monem Zafar’s critiques of asset utilization, loss-reduction targets, and FX debt recovery are all subjects of the merits and substantive facts and cannot be impugned in the review proceedings; and (i) further contentions of the applicants/petitioners relate to the breach of applicable laws including the NEPRA Act, NEP 2021 and NE Plan 2023-27, characterization of KE as an IPP, excessive and unverified CAPEX approvals, excessive losses, high recovery loss and T&D loss targets, write offs policies, provisioning for bad debts, asset based pricing viz. cost plus approach with take or pay pricing, undue adjustment/indexation mechanisms etc., absence of efficiency incentives or penalties, aggressive forecasts; matters which fall within the scope of merits and amenable to appeal scope/jurisdiction rather than review.
KE was of the view that these issues were thoroughly examined during the original proceedings and do not qualify as “mistakes apparent on the face of the record” or “new evidence.” Rather, they represent disagreements with the NEPRA Authority’s substantive findings and determination on merits; the grounds raised are in the nature of appeal rather than a limited regulatory review. These are the reappraisal of evidence, a practice deprecated time and again by the Supreme Court of Pakistan.
The power utility company further stated that by seeking to relitigate these issues, the Impugned Review Motions effectively attempt to convert the review into an appeal, which is not permitted under the NEPRA legal framework. In the instant matter however, the Impugned Review Motions are liable to be dismissed for exceeding the jurisdictional scope of review as provided for in the NEPRA legal framework.
Furthermore, it is not clear whether the mandatory review fee has been deposited by the majority of the applicants. In the absence of such payment, the Impugned Review Motions could neither have been validly presented before the NEPRA Authority nor are they legally acceptable for consideration. The failure to comply with this unequivocal statutory requirement vitiates the very foundation of the Impugned Review Motions, leaving the NEPRA Authority with no option but to reject them as being non-maintainable. Reference is made to Regulation 4-A of the NEPRA (Review Procedure) Regulations, 2009 (inserted through SRO 870 (1)/2017 dated August 31, 2017), which states:
“A motion for review will not be entertained unless it is accompanied by fees specified in the schedule from time to time.”
To reiterate, the requisite fees have not been deposited by the parties, thus pursuant to the NEPRA (Review Procedure) Regulations, 2009 as amended from time to time, the relevant Motions for Review cannot be entertained and, as such, should be dismissed.
KE said that Power Division is not competent to file a Motion for Leave for Review without the prior and specific approval of the Federal Government, as affirmed by the Supreme Court in the Mustafa Impex case (2016 PLD 808). In addition, the Power Division does not qualify as a “person” within the meaning of the NEPRA Act, and therefore lacks the requisite legal capacity to maintain the Motion. The term “person” is defined in the NEPRA Act as follows:
“… shall include an association of persons, concern, company, firm or undertaking [authority, or body corporate set up or controlled by the Federal Government or, as the case may be, the Provincial Government].”
The Supreme Court of Pakistan, in its landmark judgment Mustafa Impex, Karachi v. Government of Pakistan (PLD 2016 SC 808), has categorically held that the term “Federal Government” refers to the collective authority of the Federal Cabinet and not to the Prime Minister or any individual ministry acting on its own. The Court further declared that any executive, fiscal, or policy action purportedly taken in the name of the Federal Government without the prior approval of the Cabinet is unconstitutional, ultra vires, and void ab initio. In view of the said settled law, the Power Division, acting independently and without demonstrating Cabinet sanction, lacks the requisite competence and locus standi to maintain the present Motions for Leave for Review.
Accordingly, the Motions filed on behalf of the Power Division are liable to be treated as non- maintainable and cannot be allowed to proceed.
KE has sought further attention to Section 31(7) of the NEPRA Act, 1997 which states as follows: “Notification of the Authority’s approved tariff or uniform tariff, as the case may be; rates, charges, and other terms and conditions for the supply of electric power services shall be made, in the official Gazette, by the Federal Government within thirty days of intimation of the same by the
Authority. In the event the Federal Government falls to notify the tariff so determined by the Authority, or refer the matter to the Authority for reconsideration, within the time period specified, then the Authority may direct immediate application of its recommended and approved tariff or uniform tariff as the case may be, by way of notification of the same, subject to adjustment which may arise on account of reconsideration, if any, subsequently filed by the Federal Government.”
The first proviso to the said Section 31 (7) reads as follows:
“the Federal Government may, as soon as may be, but not later than thirty days of receipt of the Authority’s intimation of its approved tariff of public sector licensees involved in distribution and supply business, require the Authority to reconsider its determination of such tariff to the extent
of issues common to these licensees. Whereupon the Authority shall, within thirty days, determine these after reconsideration and intimate the same to the Federal Government;”
Similarly, third proviso to the Section 31 (7) reads as follows:
“the Federal Government in lieu of reconsideration requests may opt to file an appeal, however, in the event the Federal Government moves reconsideration request then it shall not subsequently be entitled to avail the remedy of appeal against the decision of reconsideration request.”
The reference to the aforesaid provisions clearly demonstrates that the right of reconsideration is vested in the Federal Government in matters that are in common relating to distribution and supply tariffs of publicly owned licensees. A review in respect of KE’s tariff matters, therefore, falls outside the statutory jurisdiction and entitlement of the Federal Government in the matters of reconsideration and is not maintainable in law.
Further, the Federal Government is given a right of appeal in lieu of the reconsideration right / entitlement or where the reconsideration request in itself is not available or Federal Government is not entitled to.
In furtherance of the foregoing paragraph, a plain reading of Section 31(7) of the NEPRA Act, 1997 makes it abundantly clear that the NEPRA Authority’s jurisdiction to reconsider any of its tariff determinations is expressly confined to cases where such reconsideration is sought by
the Federal Government and pertains exclusively to the tariffs of public-sector licensees engaged in the business of distribution and supply of electric power. The legislature, in its wisdom, deliberately omitted any reference to tariffs of the private sector entities from the scope of this provision. Hence, any attempt to seek Reconsideration of KE’s tariff is beyond the statutory powers conferred upon the NEPRA Authority and is, therefore, without lawful sanction and non- maintainable in limine.
KE had requested that the Impugned Review Motions be dismissed on the grounds of non-maintainability, to uphold the principle of due process and justice.
It is pertinent to mention here NEPRA has already termed the Review Motion maintainable and held a hearing on October 9, 2025, during which the KE again requested NEPRA to reject the Review Motion as it is not maintainable on legal and procedural grounds. The Company fears that it face financial loss of Rs 8.5 billion per month, if review motions are accepted by the Regulator.
Ends
