NEPRA Upholds Rs32.37 Tariff For K-Electric Through FY30

The National Electric Power Regulatory Authority (NEPRA) has officially notified K-Electric’s average base tariff at Rs32.37 per unit for FY24 to FY30 under its seven-year multi-year tariff (MYT) regime, after the utility failed to overturn a 19% reduction in the tariff.

The revised determination lowers the previously approved average base tariff of Rs39.97 by Rs7.60 per unit. The reduction is expected to cut the federal government’s subsidy burden by around Rs200 billion over the seven-year period.

The Rs32.37 per unit base tariff determined for FY24 will be adjusted over the following six years through FY30 based on changes in inflation and exchange rates.

The decision, however, will not directly alter electricity prices for K-Electric’s approximately 3.5 million customers in Karachi. Under the federal government’s uniform tariff policy, KE consumers continue to pay rates applicable to customers of other distribution companies rather than the utility’s separately determined base tariff.

NEPRA had initially set K-Electric’s MYT at Rs39.97 per unit before reducing it by Rs7.60, or 19%, in October 2025 after reviewing petitions filed on various grounds.

Under the revised structure, around Rs27.83 per unit represents power purchase costs, Rs2.40 covers transmission, and Rs2.90 accounts for distribution costs. Supply costs, meanwhile, carry a credit of approximately Re0.78 per unit.

The regulator reached the revised figure after reducing KE’s allowed revenue requirement for FY24 to approximately Rs519.42 billion.

The dispute originated in May 2025 when NEPRA approved an increase of Rs6.15 per unit, or 18.18%, taking KE’s FY24 tariff to Rs39.97. The tariff covering generation, transmission, distribution and supply operations through 2030 was formally notified on July 18, 2025.

The increase was later challenged through the review process. K-Electric opposed the subsequent reduction and eventually challenged NEPRA’s revised MYT determination before the Sindh High Court. The company obtained interim relief against implementation before the case was referred to NEPRA’s Appellate Tribunal, which was considered the appropriate legal forum.

On Wednesday, the three-member tribunal rejected KE’s challenge and upheld NEPRA’s revised determination, ending the approximately 11-month appeal process.

NEPRA then issued four related gazette notifications to formally implement the revised tariff determination.

The lower tariff is expected to reduce KE’s effective rate of return to around 13-14%, compared with 22-23% under the earlier determination. It is also projected to reduce government subsidy payments to the utility by approximately Rs200 billion over seven years.

K-Electric, however, said the decision would have a “substantial adverse impact” on its FY24-FY30 MYT and argued that the revised arrangement was not financially sustainable for the company.

In a material information disclosure submitted to the Pakistan Stock Exchange on Thursday, KE said NEPRA had notified its October 20, 2025 decisions following the Appellate Tribunal’s order, which had not yet been communicated to the company.

The utility further said it appeared that the tribunal had not considered the views and submissions presented by its counsel before issuing the order. KE said it would review its available legal options after receiving the tribunal’s order.

The revised tariff will remain effective unless K-Electric pursues further legal action and succeeds in obtaining a stay or overturning the determination.