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K-Electric to Incorporate Unrecovered Bills into Consumer Tariffs
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In a notable policy shift, teh National Electric Power Regulatory Authority (nepra) has approved K-Electric’s request to include unrecovered bills in its consumer tariff. this change will commence with a 6.75 percent recovery shortfall in 2023-24, gradually decreasing to 3.5 percent by 2029-30.
Nepra has set K-Electric’s base tariff at Rs40 per unit for the fiscal year 2023-24.This rate is approximately 40 percent higher than the national average tariff of about Rs28 per unit in 2025-26 for the 10 public sector power distribution companies (discos). The difference between the Discos’ average tariff and K-Electric’s tariff is covered by taxpayers through the federal budget as a tariff differential subsidy.
The regulator has altered K-Electric’s tariff mechanism from one based on 100 percent bill recovery to allowing recovery losses in the tariff. This will begin at 6.75 percent in FY24 and decrease to 3.5 percent by FY30.
Implications of the New Tariff Structure
The Discos’ tariff remains based on a 100 percent recovery of bills. The decision regarding K-Electric suggests that a similar charge may be introduced for Discos’ tariff, potentially increasing costs for consumers.
Nepra sets utility’s base rate at Rs40 per unit, 40pc higher than national average tariff