KE fears revenue hit after NEPRA lowers power tariff

KARACHI: K-Electric Limited (KE), the sole power supplier for Karachi, is facing a possible blow to its revenues after the National Electric Power Regulatory Authority (NEPRA) reduced the company’s average tariff to Rs32.37 per unit.

The revised rate replaces the earlier determination of Rs39.97 per unit, which was announced on May 27, 2025.

Company expresses reservations

In a notice to the Pakistan Stock Exchange (PSX) on Tuesday, KE said the decision “would not be sustainable for the company and would also have significant consequences for its stakeholders, including consumers.”

The utility added that it is currently reviewing NEPRA’s decision in detail and intends to “exercise available remedies as permitted under the applicable laws and regulatory framework.”

Background to the revision

NEPRA’s decision comes after it reviewed a petition from the federal government challenging its earlier determination of KE’s multi-year base tariff for the fiscal years 2024 to 2030. Following the review, the regulator decided to revise the tariff downward, significantly altering the earlier rate structure.

The move could have serious implications for KE’s financial outlook, as tariffs are directly linked to the company’s cost recovery and investment plans in Karachi’s power infrastructure.

Write-off claims and amendments

According to NEPRA’s latest determination, the regulator maintained its earlier stance on KE’s write-off claims worth Rs50 billion, noting that it “finds no reason to modify or alter the impugned decision.”

However, NEPRA introduced certain amendments in areas related to transmission, generation, and supply tariffs. These adjustments were part of the broader review process initiated through motions filed by the Power Division, Tanveer Barry, Arif Bilwani, Syed Hafeez Uddin (MNA), and Jamaat-e-Islami Karachi.

With the latest tariff cut, KE is now assessing its next steps, which may include pursuing legal or regulatory remedies. Analysts believe the company may face pressure on its cash flows if the new rates are implemented without offsetting measures.

For consumers, however, the development could translate into lower electricity bills, though the impact will depend on how the government adjusts its subsidy and fuel price mechanisms in the coming months.