Karachi : NEPRA has approved a seven-year transmission and distribution tariff for K-Electric, while the supply tariff remains under review. According to Arif Habib Brokerage House, the Multi-Year Tariff (MYT) approved by NEPRA for K-Electric covers the fiscal years 2024 to 2030. The purpose of this tariff is to promote long-term investment in Karachi’s power infrastructure.
Commenting on NEPRA’s decision, Arif Habib Group analyst Rao Amir Ali stated that K-Electric aims to reduce its technical and commercial losses from 23.1% to 16%. K-Electric expressed hope that this reduction will lead to improved electricity supply in Karachi and a significant decrease in load shedding. With new investments, K-Electric expects a rapid increase in the number of new consumers in the city.
NEPRA acknowledged in its decision that K-Electric’s operation and maintenance performance is better compared to other distribution companies (DISCOs). According to a report released by Arif Habib Group, the tariff approved for K-Electric has been set at Rs. 3.31 per unit. Due to the country’s uniform tariff policy, this decision will not directly impact electricity prices in consumer bills.
K-Electric stated that NEPRA has reduced its Return on Equity (ROE), which may affect long-term investments. Analysts at Arif Habib Group noted that losses in the transmission and distribution network and lower bill recovery could negatively impact the company’s profitability. NEPRA has also allowed adjustment based on 13.8% technical and commercial losses, and any savings in operational and maintenance costs will be passed on to the consumers.
Previously, NEPRA had approved K-Electric’s generation tariff last year, while the application for its supply tariff is currently under review.
