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Business Recorder
6 days ago
- Business
- Business Recorder
KE's two-decade journey: a privatisation that delivered—II
When discussing KE's generation portfolio, it's important to recognize that both private and public sector utilities operate within a regulated environment. Any investment in generation requires NEPRA's approval and must align with the Government of Pakistan's energy policies. In recent years, KE has been advised to off-take power from the national grid due to surplus available in the national grid —leading to the abandonment of KE's several planned power plants including the 700MW coal project. Ironically, the same critics who urge KE to tap into central capacity often also call for greater self-generation by individual consumers, without acknowledging the inherent contradiction in these demands. KE's two-decade journey: a privatisation that delivered—I Misunderstandings further persist and KE's write-offs for unrecoverable bills often draw headlines about 'double benefits.' Yet the mechanism is neither novel nor opaque: regulated utilities the world over recognise prudent costs after exhaustive audits. Any recoveries that later materialise are netted off in future filings. Similarly, in the case of alleged claw-back amounts that are currently before the court, KE disputes only the interpretation, not the formula nor the principle, and will comply with whatever the honorable court decides. On matters of safety, it is important to clear facts. For FY2023, Nepra investigated 33 electrocution-related incidents in KE's jurisdiction. What critics easily ignore is the fact that in 32 of these, the authority found no negligence on KE's part. Many of these incidents occurred within consumer premises or involved third-party encroachments, underscoring the shared nature of safety responsibility in dense, urban environments, most of which is outside KE's purview. Talking about captive plants and RLNG imports, one must ask: where were these critics when the entire country had to rely on costlier fuel because of captive preference? Every power plant must be backed by a secure fuel supply, and in the absence of local gas, KE did what was necessary to keep the city running. Now when the ministry has instructed captive to move back on the grid, concerns have been raised about KE charging a 'hefty fee' to convert captive plants to grid supply. It's important to understand that these costs are not arbitrary charges but are aligned with NEPRA-approved regulations and technical requirements. When a captive generation facility transitions to grid supply, it often requires dedicated infrastructure; new metering, protection systems, reinforcement of the nearest grid point and in fact a new grid to be set up in some cases; all of which involve material costs. These investments are necessary to ensure grid stability, safety, and quality of supply for both the industry and surrounding consumers. Moreover, KE does not profit from these charges. They are calculated based on actual technical scope and verified through internal and third-party checks. Where complaints have been raised, KE has reviewed them and wherever required, streamlined the process, reduced costs through engineering alternatives, or offered installment-based facilitation. It's also worth noting that as fuel prices for captive plants have increased, many industries are now returning to grid power voluntarily, recognizing that stable, merit-order-based electricity is both more economical and less administratively burdensome in the long run. What often gets overlooked in these debates is that privatization alone is not reform. The government may have privatized one utility, but it has not yet deregulated the power sector. True transformation will only come when the entire ecosystem — generation, transmission, and distribution — is opened up to competition under a non-exclusive licensing regime. Until then, companies like KE are expected to deliver world-class service while operating in a regulated environment. The push for CTBCM and market liberalization is the right direction, but it needs acceleration. The real innovation lies not in hardware-heavy prescriptions from the 1980s, but in building service-driven utilities that operate like customer-centric platforms, capable of adapting to how people live and consume electricity today. That shift is already underway. From renewables and smart meters to apps like KE Live, the modern utility is no longer just a wire-and-pole provider—it's a digital service partner. Customers today need electricity that adapts to their lifestyle—whether it's battery backup during unconventional hours, or real-time usage insights delivered through mobile platforms. KE has already laid the groundwork with its digitized network, underground infrastructure, and 24/7 digital engagement channels. Globally, utilities are diversifying — delivering internet through fiber over power lines, offering flexible, time-based supply models, and using AI to manage load and service reliability. KE's model reflects that evolution. Encouragingly, the Power Division and the Special Investment Facilitation Council (SIFC), are actively driving reforms in this direction, and a future built around deregulation, customer choice, and smarter service is no longer a distant concept—it is within reach. And when it comes, K-Electric is ready—with the infrastructure, digital capability, and vision to thrive in a truly competitive, service-oriented power sector.—Concluded Copyright Business Recorder, 2025
Express Tribune
05-06-2025
- Business
- Express Tribune
NEPRA approves Rs50b write-off for KE
Listen to article 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.
