IESCO Seeks 54% Tariff Hike to Rs43.54 Per Unit

Islamabad Electric Supply Company (IESCO) has proposed a 54% increase in its electricity tariff, seeking to raise the rate from the current Rs28.20 per unit to Rs43.54 per unit for calendar year 2027. The move is aimed at strengthening the company's financial position ahead of privatisation, Business Recorder reported.

The proposal was presented during a public hearing held by the National Electric Power Regulatory Authority (NEPRA) on Thursday. The regulator also reviewed tariff petitions submitted by Hyderabad Electric Supply Company (HESCO) and Sukkur Electric Power Company (SEPCO).

IESCO, listed in the first phase of the government's privatisation programme, has requested Rs157.864 billion in prior-year adjustments (PYA) to settle accumulated financial liabilities.

The company's management told the hearing that the Privatisation Commission had instructed it to clean up its balance sheet before the utility was offered to private investors.

The requested adjustments also cover expenses related to electricity supplied to Azad Jammu and Kashmir (AJ&K), which accounts for approximately 17% of IESCO's total electricity supply.

NEPRA Member (Tariff and Finance) Amina Ahmed questioned IESCO's request to recover the entire amount through a single adjustment, suggesting the financial burden should instead have been addressed gradually in phases.

During the proceedings, an intervener argued that the government, rather than electricity consumers, should bear the cost of subsidised power supplied to AJ&K.

The regulator also raised concerns about IESCO's installation of advanced metering infrastructure in Islamabad and Rawalpindi, questioning why areas experiencing higher levels of electricity theft had not been prioritised.

Separately, HESCO's tariff petition drew objections from MQM MPA Sabir Hussain Qaimkhani, who challenged the company's reported performance and urged NEPRA to reject its revised tariff assumptions.

SEPCO's financial position also came under scrutiny after its management revealed that the company's recovery rate stood at only 36% during FY26, compared with approximately 95% for electricity distribution companies operating in Punjab.

NEPRA members questioned SEPCO's substantial transmission and distribution losses and its prospects of attracting private investors given its current financial condition.

The proposed tariff changes and financial adjustments have yet to receive final approval and remain subject to NEPRA's review and determination.