Syed Saif Ul Hassan 
Oct 23, 2025
In a significant overhaul to K-Electric’s Multi-Year Tariff (MYT) framework for FY2024-FY2030, the National Electric Power Regulatory Authority (NEPRA) has approved a notable reduction in electricity prices for consumers in Karachi.
The power regulator's approval has led to a plunge of Rs7.6 per kWh, decreasing from Rs39.97 to Rs32.37 per kWh.
The latest adjustment in electricity rates reduces K-Electric’s revenue requirements from Rs606.9 billion to Rs519.4 billion.
Notable changes in K-Electric's tariff policy include the retention of a 14% US dollar-linked Return on Equity (ROE) for the generation segment, while a minimum guaranteed ROE of 35% will apply to specific plants starting November 2025.
NEPRA also discontinued tariffs for four outdated gas-based plants due to their redundancy.
Regarding transmission and distribution, NEPRA curtailed the ROE for the transmission segment to 15% and the distribution segment to 14.47%.
The authority also set stricter loss targets, reducing distribution losses from 13.9% to 9.0% and transmission losses from 1.3% to 0.75%.
Besides that, K-Electric is now required to achieve full recovery of costs, eliminating previous allowances for recovery losses. The reference fuel cost was also lowered from Rs15.9947/kWh to Rs14.50/kWh, addressing a fiscal shortfall of approximately Rs28 billion.
While analysts predict a negative earnings impact of around Rs79 billion for FY25, NEPRA maintained that these changes aim to enhance operational efficiency and reduce consumer costs.
