
PD blocks Rs4.69/unit FCA relief
The development came during a public hearing held by the National Electric Power Regulatory Authority (NEPRA), chaired by its Chairman Waseem Mukhtar. The hearing was convened to consider KE's request for provisional FCA relief for April 2025.
During the proceedings, Additional Secretary (Power Finance) Mehfooz Bhatti—accompanied by CPPA-G representative Naveed Qaiser—requested NEPRA to defer the FCA determination until the federal government's review motion on KE's Multi-Year Tariff (MYT) determination is decided. However, Bhatti did not provide any supporting financial or technical data to justify the request.
March FCA: KE seeks Rs5.02 interim negative adjustment
The Power Division formally submitted a letter dated June 23, 2025 to NEPRA seeking the deferment, but the letter was not made public. 'We are under an IMF program, and consumers are being burdened,' Bhatti stated. A NEPRA official rebutted the claim, clarifying that FCA is a pass-through item, which does not impose a direct fiscal burden on the government—unlike the Quarterly Tariff Adjustment (QTA).
Chairman NEPRA Waseem Mukhtar expressed strong reservations over the Power Division's approach, stating that such a move compromises regulatory transparency and public trust. He questioned whether the request came directly from the federal government or the Power Division. Bhatti clarified that it was the Power Division's initiative, and that formal cabinet approval was still pending.
NEPRA Member Legal, Amina Ahmed, further challenged the justification of the deferment and inquired whether CPPA-G would continue subsidizing KE. Qaiser responded that an agreement exists between CPPA-G and KE for the subsidy. To this, Member Ahmed sarcastically noted, 'You also have agreements with others,' hinting at broader inconsistencies in policy enforcement.
Chairman Mukhtar underscored that as a public hearing, the process must be transparent and not conducted 'in the dark.' He raised concerns about the long delay associated with the federal review motion, questioning if the FCA for KE would remain unresolved for as long as six months, and how such a substantial negative adjustment would be managed in the interim.
Qaiser initially suggested that since a positive FCA of paisa 10 per unit was being charged to DISCO consumers for April, the same adjustment could be applied to KE customers. However, he immediately retracted the suggestion when the Chairman pointed out the contradiction in passing on positive adjustments while withholding negative ones.
Qaiser also claimed that a new FCA mechanism summary had been sent by the Power Division to NEPRA. This was contradicted by NEPRA's Mubashar Bhatti, who clarified that NEPRA had only commented on an earlier summary, and no new document had been received.
KE CEO Syed Moonis Abdullah Alvi said KE would comply with NEPRA's decision but voiced concern over the abrupt policy shift. 'In the past, KE consumers paid higher FCAs compared to the rest of the country. No one advocated uniformity then,' Alvi said. 'Now that FCA is lower for Karachi, withholding the relief is not only unfair but also undermines confidence in regulatory fairness,' he added. He emphasized that industries and consumers in Karachi were expecting the relief and deserved equal treatment.
Following internal deliberations, Chairman Mukhtar announced that NEPRA would reschedule the hearing for next week to allow further examination of the issues raised.
In its written communication, the Power Division referred to NEPRA's June 18, 2025 public notice announcing the June 23, 2025 hearing on KE's request for a provisional FCA for April 2025. KE had sought a negative FCA of Rs 4.69/kWh, amounting to Rs 7.173 billion in consumer relief. By contrast, consumers of state-run DISCOs were charged a positive FCA of Rs 0.9306/kWh for the same month, as per NEPRA's June 5, 2025 determination, notified via SRO 1046(I)/2025.
The Power Division argued that this significant discrepancy stems from KE's higher reference fuel cost of Rs 15.9947/kWh—provisionally allowed under NEPRA's May 27, 2025 MYT determination covering FY 2023-24 to FY 2029-30. It pointed out that the reference was originally established during the January–March 2023 quarter of the previous MYT and has continued to be used despite the passage of two years.
Highlighting the potential implications of this outdated reference, the Power Division stated that both it and CPPA-G have filed review motions to seek a re-determination of the FCA references under the applicable regulatory framework. Proceeding with the FCA decision based on these disputed provisional values, the Division warned, could lead to regulatory inconsistencies, retrospective adjustments, and unequal consumer treatment.
'This could contravene the principles of fairness, transparency, and due process laid out in the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 and the NEPRA Tariff (Standards and Procedure) Rules, 1998,' the letter added.
The Power Division urged NEPRA to defer KE's FCA decision for April 2025 until the motions are decided and new FCA reference values are formally adopted. The Division said the request was being made in the interest of regulatory consistency, consumer equity, and to prevent premature or potentially unjustified adjustments.
NEPRA is now expected to revisit the matter in its next scheduled hearing.
Copyright Business Recorder, 2025
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Express Tribune
8 hours ago
- Express Tribune
PSX sustains rally as KSE-100 index crosses 133,000
The Pakistan Stock Exchange (PSX) opened on a bullish note on Monday, with the benchmark KSE-100 Index gaining 1,187.99 points, or 0.9%, current index of 133,137.05 during intra-day trading. The index recorded a high of 133,156.63 and a low of 132,467.12. Trading volume stood at over 41 million shares, with the total traded value reaching Rs 3.39 billion. This builds on last week's strong opening to the new fiscal year, when the index had hit a then-record high of 131,949.06 points. Analysts attributed the positive momentum to investor optimism surrounding potential policy clarity and improving macroeconomic indicators. Earlier in the week, the Pakistan Stock Exchange (PSX) opened the new fiscal year on a bullish note, with the benchmark KSE-100 Index surging to an all-time high of 131,949.06 points during the week ended July 4, 2025. Read: PSX kicks off FY26 with historic week The index gained 7,570 points, or 6.1% week-on-week, driven by improving macroeconomic indicators, foreign inflows, and strong investor sentiment. The rally extended momentum from the previous fiscal year (FY25), which closed with the PSX ranked as the best-performing regional bourse, delivering a 60% annual return. Easing inflation, lower electricity tariffs, and renewed interest from both local and foreign investors supported the continued upward trajectory. According to Arif Habib Limited's (AHL) weekly report, the KSE-100 Index surged from 125,627.31 to 131,949.06 during the week, posting a 6.1% gain. The rally was broad-based, supported by improved macroeconomic indicators. Inflation for June 2025 eased to 3.2% from 3.5% in May, as reported by the Pakistan Bureau of Statistics (PBS). JS Global's Syed Danyal Hussain noted that the KSE-100 index's strong FY25 close and continued FY26 momentum reflect improving sentiment. The index's 6% week-on-week increase was complemented by a 31% rise in average daily turnover (ADTO). June 2025's CPI came in at 3.2% year-on-year, bringing the FY25 average to 4.5%, a drop from 23.4% in FY24.


Express Tribune
2 days ago
- Express Tribune
City prepared to observe Ashura
As many as 350 mourning processions will be taken out in Hyderabad on the Yaum-e-Ashura on Sunday to mourn the martyrdom of Hazrat Imam Hussain (RA) and his martyrs in Karbala. Around 4,600 are deployed in the city for security of the processions and majalis. The central procession, organised by Anjuman-e-Imamia Sindh, will emanate from Qadam Gah Moula Ali (RA) in the morning. It will culminate at Karbala Dadan Shah after walking less than two kilometres through Foujdari and Al-Rahim roads. More than four dozen roads and streets intersecting the central procession's route will be sealed with tents and barbed wires. Reportedly, the city police have spent Rs one million to procure barbed wires. The procession will see a deployment of around 1,400 policemen besides personnel of Rangers. A monitoring room has been set up at SDPO City police station's office which is located on Foujdari road, aka the station road. The district police have designated 30 sensitive spots along the route of the central procession which will be manned by additional cops. Seven walk through gates will be placed at the entrance of the procession near Qadam Gah Moula Ali (RA). The CCTV cameras have been installed along the entire route. A team of bomb disposal squad will also move ahead of the procession, clearing its route. Some 1,500 policemen will be deployed for security of other processions in the district while 900 others will man important locations in the city as well as on the district's entry and exit points. Moreover, for the sham-e-ghariban majalis, around 600 policemen will be deployed. In view of the sectarian strife experienced in the previous years, the police have set up pickets in six different localities to prevent any recurrence. The police have also set up a cell to monitor posts fanning flames of sectarianism on social media.


Business Recorder
2 days ago
- Business Recorder
Futures spread expands sharply
KARACHI: The futures market at the Pakistan Stock Exchange (PSX) witnessed a sharp expansion in spreads during the week ended July 4, 2025, with the future spreads soaring by 5,825 basis points. The spread settled at positive 9.99 percent by the final trading session of the week, compared to a negative 48.25 percent in the preceding week, reflecting improved investors sentiments. On the activity front, however, the average daily futures volume stood at 180.39 million shares, registering a sharp decline of 48.5 percent from the previous week's 349.98 million shares. In value terms as well, the average daily turnover dropped by 57.8 percent, declining to Rs 7.91 billion from Rs 18.78 billion a week earlier, indicating reduced participation in high-value contracts despite increased spreads. Copyright Business Recorder, 2025