DISCOs slammed for revenue-based outages

Power firms caution if such load-shedding is stopped, circular debt will go up by Rs500b

ISLAMABAD:

Power distribution companies (DISCOs) on Tuesday came under fire over revenue-based electricity load-shedding as the regulator said it was illegal and had no legal grounds.

Following directives from the Power Division, the electricity consumers in areas where bill recovery was low faced more outages because DISCOs were receiving a hit to their revenue receipts.

If revenue-based load-shedding came to a halt, it could lead to the addition of over Rs500 billion to the circular debt, officials of power companies warned the regulator.

The National Electric Power Regulatory Authority (Nepra) conducted a public hearing on Tuesday to consider an increase of up to Rs0.27 per unit in tariffs on account of fuel cost adjustment for March 2026.

The average cost of electricity came in at Rs8.26 per unit in March compared to the reference price of Rs7.99 per unit.

As of February 2026, the circular debt had accumulated to Rs1,837 billion, reflecting a temporary increase from June 2025, primarily due to timing differences. The debt level improved in March, when it dropped to Rs1,798 billion. It was also projected that the debt would hit zero net addition by year-end, in line with the Circular Debt Management Plan.

The public hearing was informed that electricity demand had jumped 6.38% during March. Peak generation reached 18,551 megawatts while the number of protected consumers increased from around 11-12 million to 22 million.

It was highlighted that hydroelectric power generation may reach 5,500 megawatts in May 2026 against the backdrop of heatwave forecasts during peak summer. The government has also procured spot liquefied natural gas (LNG) at a cost of $23 per million British thermal units (mmBtu), which will result in per-unit cost of Rs42.

It was claimed during the hearing that DISCOs had been able to slash losses to 15.3% compared to 15.7%. Bill recoveries also improved, touching 99% as compared to 97%. DISCOs had suffered a loss of Rs221 billion during July-March 2024-25, which was reduced to Rs176 billion during the corresponding period of 2025-26.

Industrialists praised efforts of the government to increase the supply of locally produced gas to power plants. However, they questioned where that gas had gone which was curtailed due to the influx of surplus LNG imports into the country.