ISLAMABAD – The National Electric Power Regulatory Authority (NEPRA) on Monday signaled a possible negative adjustment of Rs 1.80 per unit in electricity tariffs across the country for the fourth quarter adjustment of FY 2024-25—an apparent consumer relief measure replacing the Rs 1.54/kWh from the previous quarter. However, this proposed adjustment has triggered a wave of skepticism and prompted regulatory scrutiny into the financial figures submitted by Distribution Companies (Discos).
During a public hearing chaired by NEPRA Chairman Waseem Mukhtar, the regulator questioned the credibility of the Discos’ claims, who are seeking a Rs 53.39 billion negative adjustment, largely attributed to a purported Rs 53.71 billion reduction in capacity payments. Chief Executive Officers (CEOs) and other concerned officials of Discos shared details of their claims and responded to the question asked by the Authority. However, a couple of CEOs failed to satisfy the Authority. CEOs claimed that increase in consumption in electricity was due to industry especially shifting of Captive Power Plants (CPPs) from gas to grid.
While the Power Division has pitched a slightly higher reduction of Rs 1.90/kWh, NEPRA officials and stakeholders expressed doubts over the legitimacy of the claimed Rs 780 billion in savings for FY 2024-25. Many believe the numbers may reflect accounting maneuvers like overbilling and inflated detection bills, rather than any real operational efficiency.
NEPRA’s Member (Technical) Rafique Ahmad Shaikh challenged the Discos’ performance narrative, citing past cases such as SEPCO, where NEPRA uncovered widespread misuse of detection billing to inflate recoveries. “If these losses have actually reduced, where is the on-ground evidence?” he asked, calling for a deep investigation into the claims.
On the claims of CEP GEPCO of substantial growth in consumption of electricity industry, Member (Development) , Maqsood Anwar said industrialists say that industry is closing due to higher tariffs. He further asked CEO to prepare himself in 15-20 minutes to reply further questions. However, neither the Authority asked any question him nor he courage to reply. He also astonished that how 49 per cent increase has been witnessed in power utilization by the industry in fourth quarter of FY 2024-25 as compared to same period of FY 2023-24.
NEPRA’s Mubashar Bhatti claimed that the impact of extra recovery was just Rs 3 billion as compared to the reference of NEPRA. The major impact was lower capacity charges, termination of contracts of six IPPs of Rs 17 billion, Rs 18 billion of Neelum Jhelum hydropower project capacity, in addition to reprofiling of debts of K-2 and K-3.
He confirmed 46 per cent increase in electricity consumption in fourth quarter of FY 2024-25 as compared to corresponding period of FY 2023-24. Major increase was witnessed in LESCO, GEPCO, HESCO etc. The main reason of increase in industrial consumption was stated as CPPs shifting from gas to grid. Another factor was lower tariff in this quarter as compared to the corresponding quarter of FY 2023-24.
“With increase in rates of gas and imposition of levy forced CPPs to shift towards the grid,” Bhatti maintained.
A representative of the Power Division, Naeed Qaiser, defended the figures, stating that Discos cut their losses by Rs 122 billion compared to last year. He added that of the Rs 780 billion reduction in circular debt, Rs 242 billion was from efficiency gains. However, Qaiser also acknowledged looming risks, including a projected Rs 640 billion loss in FY 2024-25 due to paying consumers switching to solar energy systems.
Meanwhile, consumer trust remains low. Karachi-based businessman Rehan Jawed criticized the ongoing Debt Servicing Surcharge (DSS) of Rs 3.34/unit, calling it a “dagger in the back of industry,” and questioned why such recovery measures continue despite claimed improvements.
Chairman Mukhtar echoed concerns and pressed the Power Division for updates on pending investigations into overbilling by various Discos, including LESCO. The Power Division’s Mehfooz Bhatti confirmed that an inquiry report had been submitted to the Prime Minister but did not elaborate on broader accountability measures.
NEPRA also highlighted inefficiencies that still plague the system: a massive backlog in new connection applications and delayed net metering approvals, with FESCO alone sitting on 4,000 pending requests.
Business leaders voiced frustration. Arif Bilwani of Karachi noted that nearly all Discos reported “remarkable” performance in the last quarter—claims that seem implausible given ongoing investigations into figure fudging, overbilling, and unsubstantiated performance claims.
Lahore-based businessman Aamir Sheikh emphasized that the 19% additional tariff imposed by the U.S. on Pakistani exports is choking industrial competitiveness. He called for immediate elimination of the cross-subsidy burden—currently over Rs 6/unit on industrial consumers—and demanded clarity on promised reductions such as the Rs 1.71/unit cut linked to petroleum levy and removal of electric duty from July 1, 2025.
Energy expert Asim Riaz raised another red flag: the government’s push to shift captive power users from gas to grid reportedly cost the gas sector Rs 242 billion, but with minimal benefit to the power sector. He criticized the lack of transparency on how the gas levy—intended to subsidize electricity costs—has been utilized.
Further concerns came from KCCI’s Tanveer Barry, who noted that promised relief from renegotiated Independent Power Producer (IPP) contracts has not materialized. He cited a 10% drop in industrial power use in Karachi and stressed that Pakistan’s high electricity rates are pricing it out of global markets, especially when compared to regional peers like India, Bangladesh, and Vietnam.
Barry also challenged the government’s cross-subsidy figures, stating that the actual burden on industrial consumers is Rs 137 billion, not Rs 93 billion as claimed. He questioned the delay in approving Karachi’s Fuel Cost Adjustment (FCA) and criticized the circular debt reduction strategy, especially since Rs 1.275 trillion in new loans are being secured to address it.
NEPRA concluded by pledging to independently verify the Discos’ claims, including through on-ground assessments and PITC data. As public scrutiny intensifies, the regulator appears poised to hold both the Power Division and Discos accountable for what many see as a mismatch between reported figures and the real-world experience of consumers.
On the issue of extraordinary delay in determination of tariff of Cold Storage industry raised by Haroon Farooqi from Karachi, Chairman NEPRA announced that the Regulator will decide on it on the basis of available record, even if Power Division fails to submit its reply to the letter of NEPRA on this issue. The Government has already granted status of industry to Cold Storages but Discos/ KE are still charging commercial tariff because NEPRA has not given its final verdict on the review of the industry. He further stated Appellate Tribunal has also given decision in the favour of the industry.
Power Division has not sent comments on the letter of NEPRA but no response came so far. Member Technical was of the view NEPRA can do nothing except writing letter.
Chairman NEPRA was of the view the Authority will issue decision on the basis of available record even if Power Division even does not send its comments. He asked Additional Secretary (Power Finance) to send Power Division’s response as early as possible.
Ends
