In a bold move, the federal government has officially filed a review petition with the National Electric Power Regulatory Authority (NEPRA) against the recently approved KE tariff structure, raising serious concerns about the financial burden it places on both the government and power consumers.

According to the petition, K-Electric (KE) has been granted a higher electricity tariff compared to other companies receiving power from the national grid. The government warns that this KE tariff structure could cost the federal treasury an estimated Rs 59 billion over the next two years, putting significant strain on national finances.

The Ministry of Energy has also flagged concerns regarding the inclusion of recovery losses in KE’s tariff, stating that this approach could shift an additional Rs 200 billion burden onto consumers over the next seven years. The ministry emphasized that such special treatment has not been extended to any other power distribution company in the country.

Another major point raised in the petition is NEPRA’s decision to allow K-Electric a loss limit of 13.90%, a figure that reportedly exceeds KE's own projected demand. Furthermore, the Ministry has objected to a special 2% margin for law and order conditions and a 12% return on equity in dollars, which could lead to an additional cost of Rs 37 billion during the tariff period.

The petition also highlights the approval of capacity payments for KE’s power plants, which the Ministry estimates will result in a financial load of over Rs 82 billion. Officials argue that these benefits create an uneven playing field, potentially leading to a dual system that disadvantages other power companies and disrupts the regulatory balance.

Warning that NEPRA’s decision will cause a sharp hike in electricity bills for Karachi’s consumers, the federal government has urged the authority to ensure equal treatment for all power companies, avoiding any preferential treatment that undermines national energy policies.

This development puts the spotlight back on NEPRA’s role in maintaining fair power pricing, while consumers await a decision that could impact electricity rates for millions in Karachi.