KE-Nepra dispute over Rs43 billion industrial tariff impact lands in SIFC

According to Business Recorder, K-Electric's long-running disagreement with the Power Division and NEPRA over a discount scheme for industrial power users has reached the Special Investment Facilitation Council (SIFC). The row goes back to the government's ICP package, launched in November 2020 to encourage industrial expansion and greater power use. KE applied it from November 2020 to June 2021 under a NEPRA determination issued on December 1, 2020.

KE says that extending the scheme to October 2023 brought a follow-up determination that clashed with its 2017 to 2023 multi-year tariff. That tariff set a sales growth target of 4.5% CAGR, with the company bearing the risk of missing or beating it. Actual growth reached only about 1.5% CAGR, which KE largely attributes to factors beyond its control, a shortfall it estimates cost close to Rs39 billion.

KE warns that enforcing the contested determination would push growth down to about 1.3% CAGR and lift losses by another Rs4 billion. It also notes that WAPDA's distribution companies (WDISCOs) can pass actual sent-out volumes into tariffs, a benefit KE lacks. After negotiations stalled, the company went to the NEPRA Appellate Tribunal first and later to the Islamabad High Court, where a stay order keeps it pending. Discussions at SIFC produced directions for KE, NEPRA and the Power Division to align their figures, and KE now seeks their help in bringing stakeholders together.