NEPRA approves Rs50b write-off for KE
The National Electric Power Regulatory Authority (NEPRA) approved on Thursday a write-off amount of Rs50.013 billion for K-Electric (KE) under the Multi-Year Tariff (MYT) period of FY2017 to FY2023. While still an acknowledgment, it is much less than what KE had asked for despite meeting NEPRA's strict guidelines on what constitutes prudent cost recovery.
The approved amount is part of the broader claim of Rs76 billion submitted by KE, for which NEPRA hearings were held in December 2024 and April 2025. Ensuring the write-off amount pertaining to unrecovered dues comprised an extensive process of meeting stringent conditions, including verification of essential documents, multiple recovery efforts, disconnections, and KE's Board certifying that all reasonable and best possible recovery efforts were undertaken.
The approved write-offs are strictly based on criteria laid out in KE's NEPRA-approved write-off policy and have undergone rigorous internal and external audits, including physical surveys and consumer-level documentation checks.
During the hearings, KE officials had stressed that these unrecovered amounts were not a result of inefficiency but a reflection of ground realities, such as the presence of unplanned settlementsslumsleading to operational challenges in areas where recoveries are no longer possible due to demolition, migration, or theft. Hearing discussions also included matters like the circular debt, which KE highlighted it had no contribution to.
Interveners and commenters shared their statements and opinions regarding KE's write-off claims. Sheikh M Tehseen, President of the Federal B Area Association of Trade & Industry (FBATI), mentioned that KE's financial sustainability and investment plans were dependent on write-off claims, while emphasising that under the current tariff framework, any such claims should be resolved fairly, recognising that 100% recovery in a city like Karachi is unrealistic.
Similarly, the President of the SITE Association of Industry, in his letter, had expressed support for a timely resolution of KE's write-off claims, emphasising the need to maintain KE's operational stability while protecting industrial stakeholders from additional financial burden, and urging NEPRA to ensure a balanced decision that supported uninterrupted industrial operations and served the greater public interest.
The Secretary General of the Overseas Investors Chamber of Commerce & Industry (OICCI) highlighted KE's investments since privatisation and wrote about its performance as a benchmark for future investors, mentioning that NEPRA's decision would set the mood for the privatisation of DISCOs. He stated that a fair evaluation and subsequent decision would support foreign direct investment (FDI) and restore investor confidence in the energy sector.
The last few days have witnessed approvals and decisions by NEPRA for KE's critical matters, including the determination of its transmission, distribution, and supply tariffs, with the write-off decision being the latest in this series.
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