ISLAMABAD:
Electricity consumers across Pakistan may see a tariff increase in the 2025-26 financial year, as several government-run power distribution companies (DISCOs) have petitioned the National Electric Power Regulatory Authority (Nepra) for interim tariff hikes under the multiyear tariff (MYT) regime.
All eight government-owned DISCOs—Gujranwala Electric Power Company (Gepco), Multan Electric Power Company (Mepco), Quetta Electric Supply Company (Qesco), Sukkur Electric Power Company (Sepco), Hyderabad Electric Supply Company (Hesco), Peshawar Electric Supply Company (Pesco), Tribal Areas Electric Supply Company (Tesco), and Hazara Electric Supply Company (Hazeco)—have submitted requests covering the MYT period from FY2025-26 to FY2029-30.
Nepra has scheduled a public hearing on June 13 to review these petitions and gather public feedback.
Revenue Recovery Requests
The DISCOs are seeking to recover billions of rupees from consumers to meet their projected revenue needs for the upcoming fiscal year. Mepco has submitted the largest interim revenue requirement at Rs139.1 billion, followed by Pesco (Rs81.4 billion), Gepco (Rs67.8 billion), Sepco (Rs58 billion), Qesco (Rs50.1 billion), Hesco (Rs39.4 billion), Hazeco (Rs12.3 billion), and Tesco (Rs7.3 billion).
Operational and Maintenance Costs
A significant portion of these requirements stems from operations and maintenance (O&M) expenses. Mepco has requested Rs63.1 billion in O&M costs, largely due to employee salaries (Rs22.3 billion), post-retirement benefits (Rs29 billion), and repair and maintenance (Rs7.8 billion).
Other companies reported similarly high O&M costs:
- Pesco: Rs37 billion (Rs32.7 billion for salaries)
- Gepco: Rs35.3 billion
- Hesco: Rs25.1 billion
- Sepco: Rs22.2 billion
- Qesco: Rs17 billion
- Tesco: Rs3.8 billion
- Hazeco: Rs7.8 billion
Depreciation and Return on Rate Base
Depreciation and return on rate base (RORB) are also key contributors to cost structures:
- Mepco: Rs8.9 billion (depreciation), Rs16.3 billion (RORB)
- Gepco: Rs4.8 billion, Rs8.8 billion
- Pesco: Rs5.6 billion, Rs12.3 billion
- Hesco: Rs3.2 billion, Rs6.8 billion
- Qesco: Rs297 million (depreciation), Rs15.7 billion (RORB)
Prior Year Adjustments and Other Costs
Several DISCOs are also seeking adjustments for previous years, adding further to the revenue requirements:
- Mepco: Rs59.5 billion
- Pesco: Rs29.3 billion
- Gepco: Rs24.4 billion
- Sepco: Rs25.6 billion
- Qesco: Rs16.3 billion
- Hesco: Rs5.8 billion
- Tesco and Hazeco: No prior year adjustments included
Tesco and Sepco have also accounted for bad debt provisions—Rs1.6 billion and Rs5.6 billion respectively—while Sepco has included an additional Rs1.6 billion in finance costs.
As the hearing approaches, Nepra has invited all stakeholders, including the general public, to submit comments and feedback on the revenue demands. The outcome may significantly impact electricity tariffs for the coming fiscal year.
