KARACHI – K-Electric (KE), the city’s sole power provider, has filed a massive “End of Term Adjustment” request with the National Electric Power Regulatory Authority (NEPRA), seeking to recover over Rs 58.95 billion from its consumers. The regulatory body is scheduled to hold a formal hearing on April 22 to scrutinize the company’s financial claims.
Breakdown of the Financial Claims
According to the petition filed by KE, the company is seeking adjustments under several financial heads:
Working Capital: The lion’s share of the request, exceeding Rs 33 billion, is attributed to working capital costs. Tax Obligations: KE has requested the recovery of Rs 15.33 billion related to various tax payments, including additional tax liabilities of Rs 7.49 billion (2023) and Rs 3 billion (2022) from previous years. Exchange Rate & Equity: Over Rs 11 billion has been sought to cover the impact of currency exchange rate fluctuations and Return on Equity (RoE). Power Purchase: A minor adjustment of Rs 26 million related to previous power purchase costs is also being passed on to consumers.
Deductions and Adjustments
In a rare move, the petition also includes a negative adjustment (credit) of Rs 1.31 billion due to a lack of planned investment in certain areas.
The NEPRA Hearing
During the upcoming hearing on April 22, NEPRA will conduct a detailed forensic audit of KE’s claims. The regulator will specifically examine the legal validity of the requested adjustments, the actual impact of investments and Interest During Construction (IDC), and the company’s overall financial structure and tax claims.
Impact on Consumers: If approved, this move will lead to a significant increase in monthly electricity bills for Karachi’s residents and industrial sectors, further straining the city’s economic landscape.
