The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the National Electric Power Regulatory Authority (NEPRA) to reject Rs268 billion (26,800 crore rupees) in disputed Prior-Year Adjustment (PYA) claims by power distribution companies (Discos), warning against passing unverified costs on to consumers.
In a representation to the regulator, FPCCI said that several claims had either been rejected previously, disputed by third parties or lacked sufficient information for verification.
The objections follow tariff petitions filed by 10 distribution companies, seeking adjustments to their multiyear tariffs for 2025-30 for calendar year 2027, along with other changes to consumer-end tariffs. Collectively, the companies have sought Rs2.64 trillion (264,000 crore rupees) in revenue requirements for 2027 to cover electricity distribution and supply costs.
FPCCI said that it had formed a special Energy Advisory Committee (EAC) to examine the petitions, including claims related to working capital, power purchase prices, PYAs and returns on revenue base.
The committee found that several companies were seeking to recover substantial costs from previous years. FPCCI said that some claims involved expenses dating back several years, while others contained calculation discrepancies or lacked the details needed for independent verification.
A review of the 10 companies’ petitions, financial statements and supporting documents found significant differences between their PYA claims and proposed distribution and supply margins.
Islamabad Electric Supply Company’s (IESCO) claims exceeded 212 percent of its proposed annual margin, while Sukkur Electric’s claims stood at 113 percent of its distribution margin.
Faisalabad Electric Supply Company (FESCO) sought adjustments equal to 91 percent of its distribution and supply margin, followed by Multan at 68 percent and Quetta at 60 percent. The figures for Lahore, Peshawar and Gujranwala stood at 41 percent, 40 percent and 32 percent, respectively. Tribal Electric did not disclose its figures.
“These are not routine formula-based true-ups and ought not to be approved as such,” the FPCCI said.
The business body also submitted company-wise objections and comparisons, detailing disputed amounts, reasons for challenging the claims and proposed disallowances based on documents available through NEPRA.
It asked the regulator to include its objections in each company’s tariff-setting process and require the Discos to respond to them in writing before public hearings. FPCCI also called for the rejection of lump-sum claims without sufficient justification and urged NEPRA to allow trade and industry representatives to participate in the hearings.
Among the individual petitions, FESCO sought Rs535 billion in revenue requirements for 2027, including Rs57 billion in PYAs. FPCCI called for the rejection of Rs26 billion linked to 11-year-old post-retirement benefits and supplementary charges that had previously been disallowed.
Gujranwala Electric sought Rs70.4 billion, including Rs17 billion in adjustments linked to Azad Jammu and Kashmir sovereign receivables dating back 19 years. Sukkur Electric requested Rs68 billion in total revenue requirements, including Rs36 billion in PYAs.
Lahore Electric Power Company (LESCO) sought the highest revenue requirement at Rs759 billion, including around Rs33 billion in PYAs. FPCCI argued that Rs27 billion of these claims should be rejected because the amounts had not been verified.
IESCO submitted Rs158 billion in PYA claims against a total revenue requirement of Rs525 billion. FPCCI said 70 percent of these claims were disputed or involved non-cash items and had been submitted as lump sums, calling for their rejection.
Peshawar Electric Power Company (PESCO) sought Rs233 billion in revenue requirements, including Rs35 billion in PYAs. Of this amount, Rs33 billion related to input tax claims dating back seven years, which FPCCI described as inadmissible.
