ISLAMABAD: In a major policy departure, the National Electric Power Regulatory Authority (Nepra) on Tuesday approved K-Electric’s request to incorporate unrecovered bills into its consumer tariff — starting with a recovery shortfall of 6.75 per cent in 2023-24, gradually declining to 3.5pc by 2029-30.

Nepra set K-Electric’s base tariff at Rs40 per unit for the fiscal year 2023-24, which is almost 40pc higher than even the national average tariff of about Rs28 per unit in 2025-26 for the 10 public sector power distribution companies (Discos).

The delta between the Discos’ average and K-Electric’s tariff is transferred to the taxpayers through the federal budget in the form of tariff differential subsidy.

In a detailed determination, the regulator changed K-Electric’s tariff mechanism based on 100pc recovery of bills and instead allowed recovery losses in the tariff, starting from 6.75pc in FY24 and gradually declining to 3.5pc by F30.

Nepra sets utility’s base rate at Rs40 per unit, 40pc higher than national average tariff

Interestingly, the Discos’ tariff is still based on a 100pc recovery of bills. The judgement on K-Electric indicated that a similar charge may be coming up for Discos’ tariff in the shape of higher costs to honest consumers.

“To ensure sufficient liquidity in the power market and to align the collection targets with current market realities, the authority........

© Dawn Business