Latest news with #MYT
Business Recorder
7 days ago
- Business
- Business Recorder
PD uncertain on power tariff changes from July 1
ISLAMABAD: The Power Division stated on Friday that it currently has no definitive estimate of whether electricity tariffs for distribution companies (Discos) will increase or decrease from July 1, 2025, as this depends on the approval of cost components already submitted to the regulator. These remarks were made by Additional Secretary (Power Finance) Mehfooz Bhatti during a public hearing on the interim distribution and supply tariffs of eight Discos for FY 2025-26 under the Multi-Year Tariff (MYT) regime. The statement came in response to a query raised by textile sector representative Aamir Sheikh. Eight Discos—GEPCO, QESCO, MEPCO, SEPCO, HESCO, PESCO, TESCO, and HAZECO—have submitted tariff petitions under the MYT framework for the five-year period from FY 2025-26 to FY 2029-30, seeking National Electric Power Regulatory Authority (NEPRA)'s approval of a combined revenue requirement exceeding Rs 455.6 billion for the upcoming fiscal year. 'I have no indication at all of what the industry tariff will be from July 1, 2025,' said Aamir Sheikh. 'Our tariff for B3 has dropped to Rs 31/32 (about 11 cents) per unit currently, and the government has committed to reducing it further. We have already booked export orders for the next quarter based on these rates. It's imperative for NEPRA, the Power Division, and the Government of Pakistan to ensure tariffs do not increase beyond May/June levels.' The hearing was briefly suspended by NEPRA Chairman Waseem Mukhtar, who demanded representation from a senior Power Division official. Mehfooz Bhatti eventually joined the session, replacing the Joint Secretary, whose presence NEPRA deemed insufficient. Bhatti, who liaises directly with the Finance Division on power sector subsidies, appeared uncertain regarding the projected tariff changes. 'There is an indication of Rs 250 billion in the budget for Targeted Distribution Subsidy (TDS) for 2025-26. We've already presented seven scenarios to the Regulator. Once the distribution margins are determined under MYT, we'll be in a better position to outline consumer tariffs after incorporating the government's subsidy. At this point, I can't provide figures, but rebasing will take effect from July 1, 2025,' he said. The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) strongly opposed any additional financial burden on consumers for the losses incurred by Discos under the MYT, until comprehensive reforms are implemented. The FPCCI argued that the burden of inefficiencies—including high technical and commercial losses, pension liabilities, and poor governance—is being unfairly transferred to consumers. Rehan Jawed from Karachi raised concerns about the poor performance of Hyderabad Electric Supply Company (HESCO), prompting NEPRA to announce that a verification team will visit HESCO upcoming Monday to investigate consumer complaints. Tanveer Barry of the Karachi Chamber of Commerce and Industry (KCCI) criticized Discos for rising losses due to operational inefficiencies, stating that consumers across Pakistan are unfairly burdened with the DSS surcharge on Power Holding Limited (PHL) loans. 'Discos' technical and commercial losses are worsening, and their recoveries fall short of NEPRA's targets. They haven't submitted investment and distribution plans, and the MYT submissions are incomplete,' Barry said. He emphasized that with power generation capacity projected to increase to 46,605 MW, resulting in higher capacity payments, the Time of Use (ToU) mechanism for industrial consumers should be abolished. He also called for third-party audits of Disco losses to present an accurate picture to NEPRA. CEOs and CFOs of the eight Discos presented details of their proposed distribution margins and expenditures. According to the tariff petition, GEPCO has sought approval of revenue requirement of Rs 67.821 billion of which Rs 16.598 billion is on account of pay & and allowances, Rs 13.815 billion post-retirement benefits, other expenses Rs 4.909 billion (total O&M cost Rs 43.446 billion), depreciation Rs 4.792 billion, RORB Rs 8.750 billion and other income negative Rs 5.418 billion other income and Prior Year Adjustment (PYA) Rs 24.375 billion. MEPCO has sought NEPRA's approval for revenue requirement of Rs 139.106 billion of which, pay and allowances are Rs 22.302 billion, post-retirement benefits Rs 29.384 billion, repair and maintenance, Rs 7.869 billion, travelling allowance Rs 1.936 billion, vehicles maintenance, Rs 1.161 billion, other expenses Rs 507 million (total O&M cost Rs 79.653 billion), depreciation Rs 4.792 billion, RORB Rs 8.750 billion, other income negative Rs 8.731 billion and Prior Year Adjustment Rs 79.453 billion. QESCO's total proposed revenue requirement for FY 2025-26 is Rs 50.120 billion which includes, pay and allowances Rs 9.947 billion, post-retirement benefits, Rs 3.044 billion, repair and maintenance, Rs1.496 billion, travelling allowance, Rs 1.936 billion, vehicles maintenance, Rs 797 billion, other expenses Rs 1.356 billion, (total) O&M cost Rs 17.100 billion), depreciation, Rs 2.944 billion, RORB Rs 15.696 billion, other income negative Rs 1.950 billion and PYA Rs 16.298 billion. SEPCO has sought total revenue requirement of Rs 58.053 billion, of which O&M cost is Rs 22.226 billion, Distribution Margin/Supply Margin, Rs 25.3032 billion, PYA Rs 25.522 billion. TESCO's revenue requirement for FY 2025-26 is estimated to be Rs 7.303 billion of which Rs O& M expense is Rs3.883 billion and DM/SM Rs 5.629 billion. PESCO's total revenue requirement for FY 2025-26 is Rs 81.449 billion which includes O&M expense Rs 37 billion, DM/ SM- Rs 52 billion and PYA Rs 29.344 billion. Hazara Electric Supply Company (HAZECO) which has been bifurcated from PESCO also presented its one-year revenue requirement. HESCO's total revenue requirement for FY 2205-26 is Rs 39.448 billion of which O& M expense is Rs 25.130 billion, DM/SM Rs 33.693 billion and PYA Rs 5.755 billion. HESCO's total revenue requirement is Rs 12.320 billion for the FY 2025-26, which includes O&M Rs 7.883 billion, depreciation, Rs 831 million, RORB Rs 3.028 billion, advance tax Rs 1.129 billion and other income negative Rs 550 million. Copyright Business Recorder, 2025
Business Recorder
06-06-2025
- Business
- Business Recorder
Nepra hearing on 13th: Interim tariffs for 8 Discos to take centre stage
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) is all set to hold a public hearing on June 13, 2025 for distribution and supply interim tariffs of eight power Distribution Companies (Discos) for FY 2025-26 under Multi-Year Tariff (MYT) regime in which the companies have sought revenue requirement of over Rs 455.6 billion. The eight Discos, GEPCO, QESCO, MEPCO, SEPCO, HESCO, PESCO, TESCO and HAZECO have filed their distribution and supply tariff petitions under MYT regime for five years' period from FY 20225-26 to FY 2029-30. According to the tariff petition, GEPCO has sought approval of revenue requirement of Rs 67.821 billion of which Rs 16.598 billion is on account of pay & and allowances, Rs 13.815 billion post-retirement benefits, other expenses Rs 4.909 billion (total O&M cost Rs 43.446 billion) , depreciation Rs 4.792 billion, RORB Rs 8.750 billion and other income negative Rs 5.418 billion other income and Prior Year Adjustment (PYA) Rs 24.375 billion. QTA & MTA: Nepra cuts tariffs for Discos and KE MEPCO has sought NEPRA's approval for revenue requirement of Rs 139.106 billion of which, pay and allowances are Rs 22.302 billion, post-retirement benefits Rs 29.384 billion, repair and maintenance, Rs 7.869 billion, travelling allowance Rs 1.936 billion, vehicles maintenance, Rs 1.161 billion, other expenses Rs 507 million (total O&M cost Rs 79.653 billion), depreciation Rs 4.792 billion, RORB Rs 8.750 billion, other income negative Rs 8.731 billion and Prior Year Adjustment Rs 79.453 billion. QESCO's total proposed revenue requirement for FY 2025-26 is Rs 50.120 billion which includes, pay and allowances Rs 9.947 billion, post-retirement benefits, Rs 3.044 billion, repair and maintenance, Rs1.496 billion, traveling allowance, Rs 1.936 billion, vehicles maintenance, Rs 797 billion, other expenses Rs 1.356 billion, (total) O&M cost Rs 17.100 billion), depreciation, Rs 2.944 billion, RORB Rs 15.696 billion, other income negative Rs 1.950 billion and PYA Rs 16.298 billion. SEPCO has sought total revenue requirement of Rs 58.053 billion, of which O&M cost is Rs 22.226 billion, Distribution Margin/Supply Margin, Rs 25.3032 billion, PYA Rs 25.522 billion. TESCO's revenue requirement for FY 2025-26 is estimated to be Rs 7.303 billion of which Rs O& M expense is Rs3.883 billion and DM/SM Rs 5.629 billion. PESCO: - Total revenue requirement for FY 2025-26 Rs 81.449 billion which includes O&M expense Rs 37 billion, DM/ SM- Rs 52 billion and PYA Rs 29.344 billion. HESCO's total revenue requirement for FY 2205-26 is Rs 39.448 billion of which O& M expense is Rs 25.130 billion, DM/SM Rs 33.693 billion and PYA Rs 5.755 billion. HESCO's total revenue requirement is Rs 12.320 billion for the FY 2025-26, which includes O&M Rs 7.883 billion, depreciation, Rs 831 million, RORB Rs 3.028 billion, advance tax Rs 1.129 billion and other income negative Rs 550 million. Copyright Business Recorder, 2025
Business Recorder
06-06-2025
- Business
- Business Recorder
Nepra allows partial claims in response to KE write-off petition
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has issued its decision on K-Electric's write-off petition, allowing partial claims of PKR 50 billion against the company's claims worth PKR 76 billion pertaining to the Multi-Year Tariff (MYT) control period spanning FY17-23. The power utility company had revised claims of unrecoverable amount of Rs 76.034 billion in receivables spanning seven years (2017–23) from Rs 67.902 billion pertains to the period prior to 2022 by including Rs 8.131 billion additional write-off claims for 2023. According to KE, it is important to highlight that the consumers were not paving overdue balances despite efforts and the settlement scheme/conversion of hook connection to metered connection given to incentive consumers, which was necessary for recovery of long outstanding dues from the defaulted consumers and/or to make them regular payers. If the Company had not offered settlement scheme/conversion of hook connection to metered connection to the defaulted consumers, these consumers would have continued to consume electricity without payment of dues hence, resulting in further accumulation of dues. In that case the amount claimed or write-off would have been higher than the amount of write-off currently being c aimed by the Company. Moreover, in case of correction of bills/detection billing, the amounts and units billed to consumers are reversed in system and are recorded as reversal of revenue. KE claimed Rs. 15.211 billion including GST for metered connections on account of settlement schemes out of the current MYT billing. According to KE, initially these connections were disconnected but reconnected after settlement schemes/consumer agreeing to convert to metered connections as per the categories of write off claims verified by the Auditors. This includes consumers in Payment Loyalty Reward (PLR) Schemes, overdue debts on account of consumption through single bulk connection and settlement schemes and consumers agreeing to convert hook connections to metered connections. According to K-Electric CEO Moonis Alvi, 'with this decision, majority of items pending to the previous control period have come to a close. KE looks forward to the MYT for the control period spanning FY 24 to FY 30, committed to meeting its serviced territory's energy needs.' The decision was released after public hearings and extensive deliberations that allowed all stakeholders to voice their concerns that were addressed by KE management. The submissions to Nepra underwent strict internal scrutiny as well as external verification by well-accredited and renowned audit firms as required by the Nepra in line with KE MYT 2017-2023. 'These costs were part of the Multi-Year Tariff awarded to the utility for the period 2017-2023, and have been approved after stringent benchmarks, audits and fulfillment of conditions laid down by Nepra in its tariff determination,' said Muhammad Aamir Ghaziani, Chief Financial Officer at KE. Arif Bilwani, Munem Zafar, Ameer Jamaat-e-Islami ,Rehan Javed and some other consumers had challenged the write-off claims of KE. Majority of the stakeholders objected to the additional and pending write off claims. The representative of JI raised the issue of bogus bills which are subsequently claimed as write off and referred his letters of May27, 2024 and January 3, 2025. Arif Bilwani also raised similar concerns regarding bogus billing. Bilwani also highlighted that there is a substantial increase in the write off claims in later years of the MYT as compared to the initial years. KE clarified that the reason for such increase is the increase in sales revenue. For example, sales revenues of private consumers increase from Rs. 169 billion in FY 2017 to Rs. 411 billion in FY 2023, thereby more write offs in FY 2023 as compared to FY 2017. On the other hand Shahid Khaqan Abbasi, ex-Prime Minister and former head of Task Force on KE issues, Omar, Junaid Ameen, Areeba Shahid and Bilal Asghar supported the claim of KE. NERPA further stated that it is 'conscious of the fact that all possible efforts have already been made by K-Electric, as confirmed by the auditors. 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.
Business Recorder
05-06-2025
- Business
- Business Recorder
K-Electric write-offs: NEPRA allows Rs50 billion as ‘full and final claim'
The National Electric Power Regulatory Authority (NEPRA) on Thursday issued its decision on K-Electric's (KE) write-off petition, allowing Rs50 billion as 'full and final claim' against the company's claims worth Rs76 billion pertaining to the Multi-Year Tariff (MYT) control period spanning FY17–FY23. The authority had reserved the decision on KE's plea last month. 'The authority hereby approves Rs50,013 million on account of write-offs pertaining to the billing of MYT 2017-2023 for K-Electric as full and final claim in line with the write off criteria stipulated in the final determination against write-off claims of Rs76,033 million,' the NEPRA said in its order. Source: NEPRA 'The authority, while allowing the write-offs is conscious of the fact that all possible efforts have already been made by K-Electric, as confirmed by the auditors. 'However, in the interests of the consumers, KE is directed to continue to actively pursue the recovery of the maximum possible amount. In case a written off amount is subsequently recovered by KE, the benefit of such amount shall be passed on to the consumers in the immediate quarterly adjustments and KE shall be required to separately disclose this amount,' the order read. KE CEO draws criticism at NA committee meeting The NEPRA further said KE shall also be required to submit certificate from its auditors each year, clearly mentioning the recovery of written off amounts, if any, pertaining to MYT 2017-2023. '….out of the requested write-offs of Rs76,033 million, approximately Rs24,337 million pertains to the previous MYT period before July 1, 2016. The previous MYT was performance based and losses were to be borne by KE and gains, if any, beyond allowed limits were subject to claw back mechanism. 'The write-off mechanism in no way allow KE to claim write-off of the previous MYT. Allowing write-offs of the previous MYT will be a clear duplication of cost. Therefore, there is no justification to allow write-offs of Rs24,337 million pertaining to the previous MYT period and the same is being set aside and disallowed,' the order read. According to KE, additional claims between FY17 and FY23 were related to unrecoverable dues against chronic defaulters filed by the utility. KE is allowed to claim these costs in the Multi-Year Tariff awarded to the utility, which is independent of the rates of electricity charged to customers in monthly bills under the uniform tariff policy. 'With this decision, majority of items pending to the previous control period have come to a close. KE looks forward to the MYT for the control period spanning FY 24 to FY 30, committed to meeting its serviced territory's energy needs,' KE CEO Moonis Alvi said. During the hearings on the KE's plea, majority of the stakeholders had objected the additional and pending write-off claims. The representative of Jamaat-e-Islami (JI) had raised the issue of 'bogus bills' which they said had been subsequently claimed as write-off. Representatives of the city's business communities had also raised concerns similar concerns. Net-metering in Pakistan: A solution for clean energy or a grid crisis? K-Electric filed its integrated MYT petition on March 31, 2016, requesting determination of MYT for a period of ten years commencing from July 01, 2016 to June 30, 2026. The said petition was decided by the authority, vide determination dated 20.03.2017, allowing KE a MYT for a period of seven years from July 2016 to June 2023. Privatised in 2005, KE is the only vertically integrated power utility in Pakistan supplying electricity to Karachi and its adjoining areas. The approval of the claims had been termed critical by the utility for its financial sustainability. Last month, the NEPRA approved KE's new MYT for transmission and distribution (T&D) network segments for FY2024 to FY2030 (MYT Period). Later, the authority also approved the utility's new MYT for the supply segment for the same period.
