LESCO Misses NEPRA Targets Despite Reported Improvements

Lahore Electric Supply Company has failed to achieve key performance benchmarks established by National Electric Power Regulatory Authority, despite reporting measurable improvements in loss reduction and recovery performance, as reflected in regulatory disclosures.

The company has highlighted operational gains, including a reduction in transmission and distribution losses, savings of approximately Rs35 billion through loss control measures, Rs23 billion in enhanced recoveries, and progress in the procurement of Advanced Metering Infrastructure (AMI). However, findings from Nepra’s Multi-Year Tariff determinations, State of Industry Report 2025, and Performance Evaluation Report 2024-25 confirm that critical regulatory targets remain unmet.

While Lahore Electric Supply Company reported a reduction in T&D losses from 15.8% to 13.4%, the prescribed benchmarks required losses to decline to 10% for FY2023-24 and further to 9.46% for FY2024-25. Actual recorded losses stood at 15.92% and 13.7% for the respective periods, thereby exceeding the permissible thresholds.

This non-compliance resulted in a financial impact estimated at Rs39.4 billion for FY2023-24 and Rs35.17 billion for FY2024-25, as per regulatory data. Analysts have observed that the reported financial gains reflect partial operational improvements rather than full adherence to mandated performance standards.

In October 2025, National Electric Power Regulatory Authority imposed a penalty of Rs25 million on the company for excessive losses, further indicating regulatory non-compliance.

Although the company reported a Rs23 billion increase in recoveries and near 100% recovery rates at year-end, the regulator has noted ongoing inconsistencies in recovery ratios, accumulation of receivables, and limited progress in reducing overdue balances.

Sector-wide observations in the State of Industry Report 2025 indicate that circular debt and outstanding receivables remain unresolved, suggesting that recovery improvements are incremental and not structurally transformative.

Lahore Electric Supply Company has also projected savings of Rs60–70 billion through the implementation of AMI meters; however, experts have cautioned that such projections remain unverified pending full-scale deployment and operational validation.

Under Nepra’s Multi-Year Tariff framework, distribution companies are evaluated across multiple performance indicators, including loss reduction, recovery efficiency, operational discipline, capital investment, and service delivery standards. Observers have noted that the company’s reporting emphasizes selective financial indicators while lacking comprehensive disclosure of overall performance metrics.

Reliability benchmarks also remain unmet. The System Average Interruption Frequency Index (SAIFI) stands at 28.16 against a target of 13, while the System Average Interruption Duration Index (SAIDI) is recorded at 2,982.94 minutes compared to an allowable limit of 14 minutes.

Regulatory findings further highlight delays in new service connections, elevated fault incidence rates, and deficiencies in complaint management systems. As of June 2025, approximately 28,984 connection requests remained pending, with fault rates per kilometre recorded as the highest among distribution companies.

Analysts conclude that although transmission and distribution losses have declined from 15.92% to 13.4%, sustained operational reforms and alignment with single-digit loss targets remain essential for achieving regulatory compliance.