Regressive power tariffs

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In a decision that epitomises regulatory capture and abdication of public interest, the National Electric Power Regulatory Authority (Nepra) has sanctioned a financial travesty by allowing K-Electric (KE) to embed its operational failures directly into consumer tariffs.

This week's approval of a Rs40 per unit base tariff — almost 40% higher than the national average — institutionalises "recovery losses" of up to 6.75%, rewards inefficiency and penalises law-abiding citizens for KE's inability to combat theft and billing failures. The move sets a dangerous precedent for Pakistan's power sector, entrenching corporate welfare at taxpayer expense.

It is KE's responsibility to address power theft and non-payment of bills. The government may facilitate it by helping it liaise with law enforcement, but granting it such a huge benefit — effectively a subsidy — gives it an unfair advantage over government-owned distribution companies, which are required to either make 100% recovery or absorb the losses. The regulator cannot be allowed to give preferential treatment to one distribution company, whether private or public.

Nepra's rationale of "market realities" is also comical. Every company in the world faces market realities. KE is welcome to stop supplying power to bill defaulters and pursue legal action against defaulters and pilferers, but forcing honest consumers to cover for dishonest ones is flat-out wrong.

Rewarding failure demoralises performers. If Nepra will not defend consumers, the government must intervene — not just in court, but by reforming a regulator prioritising corporate viability over public good. The power division has already taken a welcome step by "planning to review" the new terms, but it should also straight-up ask the parliamentary standing committee on energy to force the Nepra chief to stand in parliament and defend the sweetheart deal, and explain to Karachi why the regulator is actively trying to punish citizens.