By SKM
October 1, 2025
ISLAMABAD — The National Electric Power Regulatory Authority (NEPRA) on Wednesday publicly rebuked officials from the Power Division for what was described as disruptive and unprofessional conduct during a high-stakes hearing on a review petition challenging Rs 50.013 billion in write-off claims approved for K-Electric (KE).
The tense session saw NEPRA Member (Law), Amina Ahmed, sternly addressing the Power Division’s delegation, saying, “You are here to explain your case, despite admitting you lack authorization from the Federal Government. We will hear you out, but this is absolutely not the way to behave.” The remarks came amid repeated interruptions and procedural violations by the Power Division’s representatives.
Representing the Power Division were Additional Secretary (Power Finance) Mehfooz Bhatti and Naveed Qaiser from the Pakistan Power Management Company (PPMC). KE’s side was led by Chief Financial Officer Aamir Ghaziani and Legal Counsel Ayan Memon. Public interveners Arif Bilwani, Rehan Jawed, and Tanveer Barry also spoke at the hearing, reiterating concerns raised in their written submissions.
NEPRA Member (Technical) Rafique Ahmad Shaikh raised serious concerns over the Power Division’s failure to pay the mandatory fee required to file a review petition, calling it a fundamental legal prerequisite. He also expressed frustration over the disorderly nature of the hearing, warning, “I cannot conduct the hearing under such disorder. Everyone is speaking without the Authority’s permission. Only NEPRA Members are allowed to intervene.”
The controversy stems from KE’s multi-year tariff (MYT), approved by NEPRA in March 2017 for the period 2017–2023. The tariff initially allowed a 1.78% write-off for unrecoverable consumer bills. A revised determination issued in July 2018 introduced stricter regulatory conditions, including board-level approval, third-party audits, and enhanced compliance requirements. Over the years, KE submitted its write-off claims alongside quarterly tariff adjustments. After multiple evaluations, NEPRA issued a final determination in June 2025, approving Rs 50.013 billion in write-offs.
The Power Division has challenged this decision, particularly objecting to the inclusion of Rs 6.619 billion in General Sales Tax (GST) as part of the write-offs. The Division argued that under the NEPRA Act and tariff rules, GST is not recoverable through tariffs and should instead be dealt with by the Federal Board of Revenue (FBR). However, NEPRA Chairman Waseem Mukhtar dismissed this contention, citing Strategic Directive 31(a) of the National Electricity Plan 2023–27, and repeatedly pressed Power Division officials to clearly state their position on the overall Rs 50 billion claim.
Additional Secretary Bhatti, however, avoided a direct response, instead asserting, “We understand we are sitting in a responsible forum and expect NEPRA to give its determination on merit and protect consumer interests.” When asked again, he curtly replied, “Power Division has filed a review as per NEPRA rules. Thank you very much.”
Later in the hearing, PPMC’s Naveed Qaiser conceded that any “prudent portion” of the write-offs should be allowed in accordance with the Consumer Service Manual (CSM). His remarks appeared to soften the Division’s position, though the underlying legal and regulatory conflict remained unresolved.
On its part, KE defended its claim, stating that all regulatory requirements had been strictly adhered to and independently verified. CFO Aamir Ghaziani clarified that under the Sales Tax Act of 1990 (prior to its amendment in March 2023), all distribution companies (DISCOs) were required to deposit sales tax on billed amounts, regardless of whether the payments were actually recovered. Therefore, he said, KE’s inclusion of GST in its write-off claims was lawful. He also stressed that income tax and other taxes linked to actual collections were not included in the claim.
Legal Counsel Ayan Memon argued that the Power Division lacked the legal standing to file a review petition. Citing Regulation 3(1)(d) of NEPRA’s Review Procedure Regulations, 2009, Memon maintained that only those who were part of the original tariff proceedings or were admitted as interveners can seek a review. “The Power Division neither participated in the original proceedings nor was admitted as an intervener. Therefore, it lacks the legal capacity to seek a review,” he said.
He further asserted that the petition failed to meet the criteria for review under Regulation 3(2), as it presented neither new evidence nor an error apparent on the face of the record. As such, KE argued, the review petition is legally non-maintainable.
Public interveners also raised serious objections. Arif Bilwani questioned the transparency of the write-offs and called for more public scrutiny. Rehan Jawed criticized the continuation of Direct Subsidy Support (DSS) at Rs 3.23 per kWh, warning that it would lead to Rs 1.225 trillion in subsidies and unfairly burden KE consumers for inefficiencies in other DISCOs. “KE’s recovery efforts don’t contribute to the circular debt. Yet its consumers are being penalized through surcharges for failures in other parts of the system,” he argued.
Tanveer Barry, meanwhile, supported NEPRA’s move to fix the control period of seven years—and eleven years for the BQPS-III plant—insisting that the decision should not be reversed. He also called for KE to finalize a long-delayed gas supply agreement with the Sui Southern Gas Company (SSGC), saying fuel supply can no longer be used as an excuse for underperformance.
In closing, NEPRA Member Shaikh expressed deep concern about the state of the power sector, highlighting that it consumes 40% of Pakistan’s national budget. “Who are we fooling?” he asked rhetorically, pointing to the urgent need for transparency, accountability, and discipline across all energy stakeholders. Ends
