Pakistan: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the National Electric Power Regulatory Authority (Nepra) to reject Rs268 billion in disputed prior-year adjustment claims submitted by power distribution companies, warning that their approval could increase the financial burden on electricity consumers.
In a representation to the regulator, the country’s leading business body said several claims submitted by 10 distribution companies (Discos) were retrospective, inadequately documented, disputed by third parties or had previously been disallowed by Nepra.
The objections follow tariff petitions seeking adjustments to multiyear tariffs for 2025–30 and other consumer-end tariff changes for calendar year 2027. Collectively, the 10 Discos have sought revenue requirements of Rs2.64 trillion for the supply and distribution of electricity during 2027.
The FPCCI said its Energy Advisory Committee reviewed the companies’ tariff filings, financial statements and supporting documents, identifying claims it considers unjustified or insufficiently substantiated.
FPCCI Challenges Disputed Claims by Power Distribution Companies
According to the FPCCI, prior-year adjustment claims represent a substantial share of several distribution companies’ proposed annual margins. Islamabad Electric Supply Company (IESCO) submitted claims exceeding 212% of its proposed annual margin, while Sukkur Electric’s claims amounted to 113% of its distribution margin.
Faisalabad Electric’s claims represented 91% of its distribution and supply margin, followed by Multan at 68% and Quetta at 60%. The corresponding figures for Lahore, Peshawar and Gujranwala stood at 41%, 40% and 32%, respectively.
The FPCCI said the claims should not be treated as routine tariff adjustments without detailed scrutiny. It urged Nepra to reject lump-sum requests, require itemised evidence and ensure that disputed amounts are independently verifiable.
Among the individual petitions, Lahore Electric sought the highest overall revenue requirement at Rs759 billion, including approximately Rs33 billion in prior-year adjustments. The FPCCI argued that Rs27 billion of those claims should be rejected because they had not been verified.
IESCO sought Rs525 billion in total revenue requirements, including Rs158 billion in prior-year adjustments. The business federation said 70% of IESCO’s claims involved disputed amounts or non-cash items and had been submitted as a lump sum.
Faisalabad Electric requested Rs535 billion, including Rs57 billion in prior-year adjustments. The FPCCI called for rejecting Rs26 billion related to post-retirement benefits and supplementary charges it said had previously been disallowed.
Business Body Seeks Transparency in Nepra Hearings
The FPCCI has asked Nepra to incorporate its objections into each distribution company’s tariff-setting process and require written responses to specific concerns before public hearings.
It has also called for trade and business organisations to be allowed to participate in the hearings, arguing that transparent scrutiny is necessary before disputed costs are passed on to electricity consumers.
Other contested claims include Rs17 billion sought by Gujranwala Electric in prior-year adjustments linked to long-standing Azad Jammu and Kashmir sovereign receivables, and Rs36 billion claimed by Sukkur Electric within its total revenue requirement of Rs68 billion.
Peshawar Electric has sought Rs233 billion, including Rs35 billion in prior-year adjustments. According to the FPCCI, Rs33 billion of the claims relate to input tax issues dating back seven years, which it considers inadmissible.
The regulator’s review of the petitions will determine which adjustments, if any, are accepted for inclusion in the companies’ tariff requirements. The FPCCI’s objections represent the business body’s position, and the disputed claims have not been established as approved consumer charges.