NEPRA Approves 7-Year Tariff Plan for K-Electric Amid Consumer Concerns Over Dollar-Based Profit
The **National Electric Power Regulatory Authority (NEPRA)** has approved a **7-year multi-year tariff (MYT)** for **K-Electric**, covering the period from **2024 to 2030**. The approval outlines new electricity distribution and transmission rates, along with provisions for profit margins that have drawn both support and criticism.
According to NEPRA, **K-Electric has been granted a tariff of Rs. 3.31 per unit** for its **electricity distribution business**, despite the company requesting a higher tariff of **Rs. 3.83 per unit**. For its **transmission operations**, the approved tariff stands at **Rs. 2.98 per unit**.
The tariff determination includes a **14% return on equity (ROE)** for the distribution segment and **12% ROE** for transmission. However, what has sparked the most debate is the **approval of dollar-based returns** for K-Electric’s distribution and transmission businesses, **despite opposition from the federal government and consumers**.
Sources revealed that during public hearings on the tariff petition, **consumers strongly opposed the dollar-based return mechanism**, arguing that K-Electric is not an **Independent Power Producer (IPP)** and should not be entitled to such financial treatment.
NEPRA, in its defense, emphasized that the new tariff is aimed at **ensuring sustainable operations and investment in infrastructure** for Karachi’s electricity needs. The regulator maintains that the returns are within standard regulatory frameworks and are necessary to attract future investment.
The decision comes amid heightened scrutiny of power sector policies and pricing mechanisms, especially given Pakistan’s ongoing energy challenges and public dissatisfaction with rising electricity costs.
Consumer advocacy groups have called for **greater transparency and accountability** in tariff decisions, while urging NEPRA and the government to **balance investor returns with consumer affordability** in the years ahead.
