By SKM
March 19, 2025
ISLAMABAD: The Textile Industry from Sindh has asked NEPRA to prove itself as a neutral regulator in the hearing scheduled to be held today (March 20, 2025) on the petition of K. Electric seeking negative FCA (Fuel Charge Adjustment) of Rs4.48 per unit for month of January 2025 with an impact of Rs 4.695 billion in favour of consumers.
- Electric in its petition has also, in pursuant to the determination of general tariff of power plants of KE for the period post June, 2023, pleaded that the required partial load, open cycle and degradation curves along with startup cost for approval and an amount of Rs13.5 billion for the period July 2023 to January 2025 is accordingly pending for adjustment out of which Authority has set aside Rs5.4 billion in KE’s FCA decision for November 2024. KE has also requested the Authority to also consider the said adjustment of accumulated actualization of fuel cost so that the recovery can be made from the negative fuel cost variation of December 2024 and January 2025 to ensure consumers are not burdened at later stage.
All Pakistan Textile Mills Association (APTMA) in its communication to registrar of the regulator submitted its plea as intervenor mentioned that NEPRA’s handling of KE’s Fuel Charge Adjustments (FCA) raises serious concerns about its impartiality, regulatory priorities, and commitment to consumer protection. “The latest FCA decision once again demonstrates a clear bias toward KE’s financial interests at the direct expense of Karachi’s consumers and industries.”
APTMA as an intervener in its plea said that KE has submitted a claim of Rs. 13.5 billion for partial load, open cycle, degradation curves, and startup costs for the period July 2023 – January 2025, requesting that Rs. 5.4 billion be deducted from the negative FCA of November 2024. However, these costs remain unverified and, in many cases, unverifiable.
The Textile Industry also raised critical questions which include i) On what legal or regulatory basis is NEPRA allowing KE to recover unverified costs while denying Karachi’s consumers their rightful FCA relief? Ii) How can NEPRA justify cutting consumer benefits before even determining and verifying KE's claimed costs? Ii) If NEPRA’s mandate under Section 7(6) of the NEPRA Act is to protect both consumer and industry interests with transparency and impartiality, why is it prioritizing KE’s financial claims over consumer relief?
Furthermore, NEPRA’s own determinations would have stated that any such adjustments must be based on audited and verified numbers. Yet, NEPRA is approving these deductions without proper auditing and validation, contradicting its own regulatory framework.
APTMA also says that this selective enforcement exposes regulatory favouritism, where NEPRA quickly accommodates KE’s financial interests without proper scrutiny while delaying or ignoring fully verified claims from Karachi’s consumers and industries.
APTMA also placed the question saying why is NEPRA Supporting KE but Refusing to Release the Verified Rs. 33 Billion COVID Incremental Subsidy?
NEPRA has failed to release Rs. 33 billion in undisputed COVID incremental subsidy that has been pending for over three years. KE lost its appeal at the NEPRA tribunal but managed to obtain a stay order from the Islamabad High Court to delay the payment further. Meanwhile, Karachi’s industries have suffered a cumulative competitive loss of Rs. 300 billion against industries in the rest of Pakistan that received this subsidy. When NEPRA was asked during the tendency of the case that KE does not have a stay from tribunal and subsidy should be released, the request was ignored and not acted on.
If NEPRA can approve FCA adjustments for KE without verification, why hasn’t it ordered the release of the Rs. 33 billion COVID subsidy, which has already been verified?
- If NEPRA is willing to cut consumer benefits to favor KE’s financial stability, why won’t it balance the scales by issuing a notification to provisionally release at least Rs. 30 billion of the Rs. 33 billion subsidy for Karachi’s consumers?
- Is NEPRA a regulator acting in the public interest, or is it merely facilitating KE’s financial gains at the expense of Karachi’s industries and consumers?
By deducting unverifiable costs from negative FCA, NEPRA is creating a precedent where consumer relief can be arbitrarily withheld under the pretence of “cost adjustments” This defeats the purpose of negative FCAs and increases financial uncertainty for consumers and businesses alike.
NEPRA’s role is to ensure transparency and regulatory fairness, not to shield KE from financial accountability. If it is willing to facilitate KE’s recovery of costs, it must also ensure that verified consumer claims-such as the COVID incremental subsidy-are honoured without delay.
APTMA stresses NEPRA and the Power Division must set a defined margin for Open Cycle and Startup Fuel Costs in MYT
The lack of a predefined margin for open cycle, startup fuel costs, and other similar expenses in the Multi-Year Tariff (MYT) has allowed KE to repeatedly recover such costs through discretionary FCA adjustments. NEPRA’s failure to incorporate these costs under a structured tariff framework has led to financial unpredictability and room for manipulation.
NEPRA must establish a fixed margin for open cycle, startup fuel, and similar costs in MYT to ensure accountability and prevent arbitrary adjustments that burden consumers.
NEPRA must maintain regulatory neutrality. It cannot continue favoring KE while ignoring consumer interests. If NEPRA does not take immediate corrective measures, it will reinforce the perception that it is no longer a neutral regulator but an advocate for KE. Karachi’s consumers and industries deserve a fair, transparent, and accountable regulatory framework-not one that is designed to benefit KE at their expense. Ends
