Power Companies Ask NEPRA to Increase Electricity Tariffs After Budget

Power tariffs are expected to rise in fiscal year 2025-26 as all eight government-owned distribution companies (DISCOs) have requested interim increases from the National Electric Power Regulatory Authority (NEPRA) under the multi-year tariff (MYT) regime. NEPRA has scheduled a public hearing for June 13 to review the petitions. The eight DISCOs involved in these petitions are collectively seeking over Rs. 480 billion from consumers to cover operating expenses, depreciation, return on assets, and prior adjustments. MEPCO has sought the highest revenue requirement at Rs. 139.1 billion, followed by PESCO (Rs. 81.4 billion), GEPCO (Rs. 67.8 billion), SEPCO (Rs. 58 billion), QESCO (Rs. 50.1 billion), HESCO (Rs. 39.4 billion), HAZECO (Rs. 12.3 billion), and TESCO (Rs. 7.3 billion). A significant portion of the revenue requests is driven by operations and maintenance (O&M) costs. MEPCO has proposed Rs. 63.1 billion in O&M, including Rs. 22.3 billion for staff pay, Rs. 29 billion for post-retirement benefits, and Rs. 7.8 billion for repairs. PESCO’s O&M is Rs. 37 billion, with Rs. 32.7 billion for salaries. Several DISCOs have also sought prior-year adjustments: MEPCO (Rs. 59.5 billion), PESCO (Rs. 29.3 billion), SEPCO (Rs. 25.6 billion), GEPCO (Rs. 24.4 billion), QESCO (Rs. 16.3 billion), and HESCO (Rs. 5.8 billion). Tesco and Sepco have factored in bad debt provisions of Rs. 1.6 billion and Rs. 5.6 billion, respectively. SEPCO has also reported Rs. 1.6 billion in finance costs. NEPRA has invited stakeholders to submit comments ahead of the June 13 hearing, where it will evaluate the financial justifications and decide on the proposed tariff increases.