The National Electric Power Regulatory Authority (NEPRA) has reported that Pakistan’s electricity companies suffered a massive Rs281 billion loss in the 2023-24 fiscal year due to poor performance and inefficiencies. The companies failed to utilize cheaper power generation options despite a surge in electricity demand, which further deepened their financial struggles. The report also highlighted that the companies once again did not meet loss reduction targets, adding to the sector’s problems.
Additionally, the poor recovery of dues from consumers led to a Rs380 billion shortfall in the national treasury, exacerbating the country’s economic challenges. Throughout the year, over 3.4 million complaints were registered against these companies, with the majority relating to issues of poor service and billing discrepancies.
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A significant concern raised by NEPRA was the alarming 140 fatalities linked to power distribution companies, with K-Electric—the power distributor in Karachi—reporting the highest number of deaths at 34 fatalities, including 32 civilians and 2 employees. NEPRA called for stricter safety measures to prevent such incidents, stressing the need for operational improvements to minimize financial losses and ensure safer practices in the sector.
In a related development, K-Electric (KE) has requested Rs68 billion in write-offs from NEPRA. The claims span multiple fiscal years, with KE seeking to recover losses under the Multi-Year Tariff (MYT) framework. KE’s audited accounts show Rs119 billion in bad debts, but the company has requested approval for Rs68 billion to cover unrecovered amounts. KE CEO Moonis Alvi argued for policy consistency, stating that these claims represent legacy liabilities rather than current receivables.
NEPRA scrutinized KE’s recovery efforts, which have been hampered by macroeconomic instability, tariff hikes, and the issue of illegal “hook” connections. Although KE reported a peak recovery rate of 95.4% in FY2022, ongoing economic challenges have undermined these gains. KE also stated that it had reduced illegal hook connections from 4% to 0.2% but acknowledged that certain areas remain problematic.
During the hearing, stakeholders expressed differing views, with some warning against passing these financial burdens onto consumers already grappling with high electricity costs. Others called for a transparent and consistent regulatory framework to address the underlying financial issues. The outcome of NEPRA’s deliberations on KE’s write-off request is expected to set a significant precedent for dealing with financial challenges in Pakistan’s energy sector.
