Government and Karachi Consumers Oppose K-Electric's Rs 60 Billion Backdated MYT Claims
The federal government and Karachi consumer groups formally opposed K-Electric's Rs 60 billion backdated End-of-Term adjustment claims at a NEPRA public hearing on Tuesday. NEPRA acknowledged the legal basis for the adjustments under the 2017–23 MYT framework but did not issue a final determination.
The federal government and Karachi-based consumer groups on Tuesday formally opposed K-Electric's (KE) attempt to recover approximately Rs 60 billion in backdated End-of-Term (EoT) adjustments at a National Electric Power Regulatory Authority (NEPRA) public hearing, arguing the claims are exaggerated and would unfairly shift costs onto Karachi ratepayers. NEPRA concluded the hearing without issuing a final order, noting only that the petition falls within the approved Multi-Year Tariff (MYT) framework for the control period 2017–23.
What K-Electric Is Claiming
KE's Senior Director Finance, Ayaz Amir, presented a cumulative EoT adjustment demand of Rs 43.6 billion covering three components under the MYT framework:
- The impact of exchange rate variations on the allowed return on equity (RoE)
- Investment-related adjustments for the control period
- Working capital actualisation based on actual balances versus the projected benchmarks approved at the start of the MYT cycle
On top of this, KE sought approval of Rs 18.5 billion in tax pass-through claims, which Amir described as strictly compliant with NEPRA's MYT determination. Together, the two demands total around Rs 62 billion.
The MYT (Multi-Year Tariff) is a regulatory mechanism under which NEPRA sets KE's allowed revenues and costs over a multi-year control period. End-of-Term adjustments reconcile actual outcomes — such as real exchange rates, actual taxes paid, and real capital spending — against the projections made at the start of the period.
How the Government and Consumers Pushed Back
Additional Secretary of the Power Division, Mehfooz Bhatti, speaking on behalf of the federal government, told NEPRA the claims were exaggerated and should be rationalised against detailed financial workings submitted by the Power Division. He specifically argued that working capital costs should be revised downward, implying KE has overstated the gap between approved benchmarks and actual balances.
Karachi industrialists, including Rehan Javed and Tanveer Barry, raised a pointed counter-argument: KE has, through thousands of court cases spanning decades, blocked the payment of Rs 32 billion already determined by NEPRA to be owed back to consumers under the regulator's clawback mechanism — yet the utility is simultaneously and swiftly seeking backdated adjustments in its own favour. They argued the financial burden must not be transferred to Karachiites or to the national taxpayer.
NEPRA's Position After the Hearing
Without delivering a final determination, NEPRA stated that the mechanisms for EoT adjustments were incorporated and approved in both the original MYT determination for FY17–FY23 and the mid-term review determination, which envisaged specific components to be reviewed at the end of the control period through a prescribed regulatory mechanism. In other words, NEPRA confirmed the legal basis for EoT adjustments exists — but left the quantum and eligibility of KE's specific claims unresolved. A written order is expected in due course.
Frequently Asked
Questions about this story
What is an End-of-Term adjustment and why is K-Electric claiming Rs 60 billion under it?
An End-of-Term (EoT) adjustment reconciles what a utility was allowed to earn and spend under its Multi-Year Tariff against what actually happened — covering exchange rate swings, real capital spending, and actual working capital costs. K-Electric is claiming Rs 43.6 billion for these reconciliation items plus Rs 18.5 billion for taxes it says it actually paid, totalling roughly Rs 62 billion for the 2017–23 control period.Will Karachi electricity bills increase if NEPRA approves K-Electric's Rs 60 billion claim?
Yes, almost certainly. If NEPRA approves the full or partial claim, the allowed recovery would be passed through to KE's customers via future tariff adjustments, raising per-unit charges for households and businesses across Karachi, Hub, and surrounding areas. The exact per-unit impact will depend on how much NEPRA approves and over how many months the recovery is spread.What is the Rs 32 billion clawback that Karachi industrialists raised at the NEPRA hearing?
NEPRA previously determined that K-Electric had overcharged consumers and ordered Rs 32 billion to be returned through its clawback mechanism. KE has contested this through thousands of court cases, meaning consumers have not yet received that money. Industrialists argued it is unfair for KE to seek fresh backdated recoveries while blocking this determined refund.Has NEPRA approved or rejected K-Electric's claims?
No. NEPRA concluded the public hearing on 13 May 2026 but did not issue a final order. The regulator confirmed that the legal mechanism for EoT adjustments exists within the approved MYT framework but left the actual amounts unresolved. A written determination is expected after NEPRA reviews all submissions.Does the K-Electric MYT dispute affect electricity consumers in Lahore, Islamabad, or other cities?
No — K-Electric operates as a vertically integrated utility exclusively in Karachi and certain parts of Balochistan. Consumers in Lahore (LESCO), Islamabad (IESCO), Multan (MEPCO), Peshawar (PESCO), and other cities are served by different DISCOs under WAPDA's distribution network and are not directly affected by this case.
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