Nepra halts K-Electric’s Rs7.17bn power refund after govt’s intervention

ISLAMABAD: In a last-minute twist during a public hearing on Monday, Pakistan’s power regulator Nepra indefinitely halted K-Electric’s proposal to refund Rs4.69 per unit — or nearly Rs7.17 billion — to Karachi-based consumers under April’s fuel cost adjustment (FCA), following a surprise intervention by the federal government.

The Power Division urged the Nepra to postpone the hearing, citing fiscal implications linked to the IMF program — a move that sparked sharp criticism from Nepra Chairman Waseem Mukhtar. “What kind of timing is this when the hearing has already begun?” he asked, questioning why the objection wasn’t raised earlier when the public notice was issued.

The refund, had it been approved, would have marked the eighth straight month of electricity cost relief for K-Electric customers. Nepra officials pushed back against the government’s stance, noting that monthly FCAs do not affect the federal budget. The Power Division argued that the FCA calculation was based on a provisional reference fuel cost of Rs15.99/kWh, which is currently under review. In contrast, ex-Wapda Discos were charged a positive FCA of Rs0.93/kWh in the same month, potentially creating inconsistency and unequal treatment, the ministry said.

Officials also noted that review petitions on the Multi-Year Tariff (MYT) determination have been filed by the government and the Central Power Purchasing Agency (CPPA), further complicating the matter. The ministry asked the Nepra to delay its decision until the fuel cost benchmark is re-evaluated.

Chairman Mukhtar said the Nepra would seek legal advice on the Power Division’s letter — which he ordered published on the regulator’s website — and hold a new hearing after stakeholder input. He warned that delaying FCA approval could disrupt the billing cycle, raising the question: would the cost fall on K-Electric or its consumers? K-Electric CEO Moonis Alvi said the utility would follow Nepra’s final order but called for clarity and fairness in applying uniform power pricing principles.