Business Body Opposes Rs268bn Power Tariff Burden

Pakistan’s top business representative body has opposed an additional Rs268 billion burden on power consumers, warning that the amount sought by former Wapda distribution companies through prior-year adjustments should not be passed on without strict scrutiny. The objection has been raised before the National Electric Power Regulatory Authority as part of the tariff review process.

The Federation of Pakistan Chambers of Commerce and Industry said the claims filed by distribution companies include amounts that are inflated, disputed, retrospective or previously disallowed. It has asked the regulator to reject claims that lack proper documentation or cannot be independently verified through the companies’ own filings and financial statements.

The tariff petitions relate to indexation of multiyear tariffs for calendar year 2027 and other consumer-end adjustments. Collectively, the distribution companies have claimed Rs2.64 trillion in revenue requirements for the year, covering power distribution and supply costs across their respective service areas.

The business body said it formed a special energy advisory committee to examine the tariff filings, including working capital claims, power purchase prices, prior-year adjustments and returns on revenue base. The committee reviewed petitions, annexures and financial statements submitted by all 10 distribution companies.

According to the review, several companies are seeking to pass major prior-year adjustment claims to consumers. The objections highlight cases where the claimed amounts are large in comparison with proposed annual margins, raising concerns that consumers and businesses may face higher costs from disputed or inadequately explained charges.

The committee said Islamabad Electric Supply Company’s prior-year adjustment claims exceeded 212 percent of its proposed annual margin, while Sukkur Electric’s claims stood at 113 percent of its distribution margin. Faisalabad, Multan and Quetta companies also showed sizeable claims compared with their margins, while Lahore, Peshawar and Gujranwala companies recorded lower but still significant shares.

The federation argued that these claims should not be treated as routine formula-based adjustments. It demanded component-wise substantiation, detailed written responses from the distribution companies and the inclusion of its objections in each tariff-setting process, including public hearings.

The issue is important for households, businesses and manufacturers already facing high electricity costs. If approved without deductions, the additional burden could further raise energy prices, affect production costs and add pressure on inflation, especially for industries competing in domestic and export markets.

The next step rests with the power regulator, which must examine whether the claims are legally admissible, properly documented and fair to consumers. Business groups are expected to push for direct participation in hearings so that disputed amounts are challenged before any final tariff decision is made.