Govt hails Nepra move to slash KE tariff, says it will ‘reduce additional burden on taxpayers’
ISLAMABAD: The government on Monday hailed the National Electric Power Regulatory Authority’s (Nepra) recent decision to slash K-Electric’s multi-year tariff, saying it will reduce the “additional burden on taxpayers” and that the move was not against the interests of Karachi’s power consumers.
Last week, Nepra reduced KE’s multi-year tariff for the fiscal year 2023-24 by Rs7.6 per unit, from Rs39.97 to Rs32.37. KE warned that the move will have “far-reaching consequences for its stakeholders, including consumers”.
In a statement on Monday, the Ministry of Energy’s Power Division said certain elements were unfortunately presenting the Nepra decision in a “distorted and misleading manner, attempting to create the false impression that the decision is against the interests of electricity consumers in Karachi”.
“The reality is exactly the opposite,” the Power Division asserted.
The Power Division spokesperson clarified that Nepra’s review in this matter was primarily related to KE’s administrative and operational affairs.
The statement read: “As a result of Nepra’s decision, the additional burden on taxpayers will be reduced, and K-Electric will be incentivised to cut losses instead of passing them on.
“Previously, due to inefficiencies, K-Electric was effectively compensated with billions of rupees in subsidies, financed through the national budget. This revised determination will help reduce that unnecessary annual fiscal burden.”
The Power Division highlighted that the regulator’s review “removes the unfair disparity” that existed between KE and public-sector distribution companies (Discos). “K-Electric must now undertake administrative reforms and demonstrate operational improvement to control its inefficiencies.”
The statement assured citizens: “There is no risk of load-shedding in Karachi arising from the retirement of loss-making or idle generation plants, because cheaper and sufficient electricity is already available in the national grid, and the infrastructure to deliver this power to Karachi consumers is in place.”
In its statement, the Power Division highlighted that before the Nepra review decision, KE had the ability to pass on “non-recovered dues to the public, effectively converting its inefficiencies into an additional burden on taxpayers”.
“Under the new framework, this will no longer be permissible. Only those receivables which K-Electric can prove — with evidence — to be genuinely unrecoverable despite all reasonable efforts will be considered by Nepra. Monitoring Desk
