ISLAMABAD:
The National Electric Power Regulatory Authority (NEPRA) on Thursday approved a Rs50.013 billion write-off for K-Electric (KE) for the FY2017–FY2023 period under its Multi-Year Tariff (MYT) framework. The approval, though substantial, falls short of KE’s original Rs76 billion claim, despite the utility fulfilling NEPRA’s stringent criteria for allowable cost recovery.
The decision followed detailed hearings held in December 2024 and April 2025, where NEPRA evaluated KE’s request based on documented efforts to recover outstanding dues. These included mandatory disconnections, repeated collection attempts, and board-level certification confirming that all reasonable recovery avenues had been exhausted.
The approved write-off amount pertains strictly to uncollected dues deemed irrecoverable and aligns with NEPRA’s officially sanctioned write-off policy. The verification process underwent multiple layers of scrutiny, including third-party audits, field surveys, and consumer-specific checks.
During the proceedings, KE emphasized that the unpaid amounts stemmed from challenging ground realities rather than inefficiencies. Company representatives pointed to the existence of unplanned and informal settlements—such as slums—where infrastructure loss, population displacement, and electricity theft have rendered recoveries nearly impossible.
KE also clarified that it had no role in contributing to the circular debt and should not be penalized for broader structural issues.
Stakeholders from Karachi’s business and investment community weighed in on the matter. Sheikh M Tehseen, President of the Federal B Area Association of Trade & Industry (FBATI), stressed that KE’s ability to remain financially viable and continue investing in infrastructure hinged on the fair resolution of its write-off claims. He acknowledged that achieving 100% bill recovery in a sprawling, diverse city like Karachi was an unrealistic expectation.
Similarly, the SITE Association of Industry urged NEPRA to consider the larger industrial and economic context. In a written statement, the association supported a timely resolution of the claims, advocating for KE’s operational stability while also protecting industries from undue financial strain. They called on NEPRA to strike a balance between utility viability and industrial continuity.
The Overseas Investors Chamber of Commerce & Industry (OICCI) also weighed in, highlighting KE’s investment track record since privatisation and its role as a model for potential investors. The chamber stressed that NEPRA’s decision would serve as a litmus test for future privatisations, particularly of state-run distribution companies (DISCOs). A transparent and equitable decision, it said, would bolster foreign direct investment and investor confidence in Pakistan’s power sector.
This approval comes as part of a series of recent regulatory decisions concerning KE’s operational framework, including revisions to its transmission, distribution, and supply tariffs. The write-off ruling marks another key milestone in KE’s ongoing engagement with the regulator to ensure financial and operational continuity.
