The National Electric Power Regulatory Authority (NEPRA) has notified K-Electric’s average base tariff at Rs32.37 per unit for the seven-year Multi-Year Tariff (MYT) period from FY2024 to FY2030.

The regulator had initially set the average base tariff at Rs39.97 per unit before reducing it by Rs7.60, or 19 per cent, following review petitions from several stakeholders.

NEPRA’s official notifications dated September 23 formally give effect to the review decisions.

The revised base tariff will apply to FY2024 and will undergo inflation and exchange-rate adjustments during the remaining years of the MYT period.

The revision is expected to reduce the federal government’s subsidy payments to K-Electric by around Rs200 billion over seven years.

K-Electric Loses Appeal Against Tariff Cut

K-Electric challenged NEPRA’s revised tariff determination before the Sindh High Court and obtained a stay against its implementation.

The matter later moved to NEPRA’s Appellate Tribunal.

A three-member tribunal dismissed K-Electric’s appeals and upheld the regulator’s revised determination.

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NEPRA then issued four related gazette notifications covering K-Electric’s supply, distribution and transmission tariff decisions.

The latest decision leaves the revised Rs32.37 base tariff in place unless a higher court later stays or overturns it.

K-Electric has said the decision could significantly affect its MYT for FY2024-FY2030.

The company said it would review the detailed tribunal order and consider the legal remedies available to it.

Consumers Will Continue Paying Uniform Tariff

Despite the revised base tariff, K-Electric customers will not directly pay Rs32.37 per unit as the company’s consumer-end tariff.

NEPRA clarified that consumers in K-Electric’s service area will continue to pay the uniform tariff applicable to consumers of other distribution companies.

The arrangement follows federal government policy guidelines issued under the National Electricity Policy 2021.

This means the latest NEPRA notification mainly affects K-Electric’s regulated tariff structure and the government’s subsidy obligations rather than immediately changing the basic tariff paid by Karachi consumers.

Government Had Challenged Original Rs39.97 Tariff

The federal government had challenged NEPRA’s original Rs39.97 per-unit base tariff.

It argued that the original determination could provide K-Electric with an additional benefit of almost Rs750 billion over the seven-year control period.

The government raised concerns over several tariff components, including allowances for law and order, system losses and fuel price adjustments.

Other stakeholders, including Jamaat-i-Islami, Karachi-based industrialists and K-Electric, also filed review petitions on different aspects of the tariff determination.

NEPRA accepted several substantive points during its review process and reduced the base tariff to Rs32.37 per unit.

The regulator said its legal framework allows it to correct material errors and align tariff decisions with sector conditions when the public interest requires such action.

K-Electric Says Tariff Is Not Financially Sustainable

K-Electric has disputed the revised tariff and warned about its financial impact.

A company spokesperson said the tribunal had dismissed the appeals through a verbal order, while the detailed written order remained pending at the time of the company’s statement.

The company said the revised tariff would have a substantial adverse impact on its MYT for FY2024-FY2030.

K-Electric also said it would consider further legal action after reviewing the tribunal’s detailed decision.

The latest notification gives effect to NEPRA’s revised tariff determination while leaving open the possibility of further legal proceedings.