Nepra has approved K-Electric’s request to incorporate unrecovered bills into its consumer tariff, starting with a recovery shortfall of 6.75% in 2023-24. This percentage will gradually decline to 3.5% by 2029-30.

For FY24, Nepra set K-Electric’s base tariff at Rs40 per unit, which is about 40% higher than the national average tariff of around Rs28 per unit for public sector companies in 2025-26. This difference is passed on to taxpayers through a tariff differential subsidy.

In its determination, Nepra shifted K-Electric’s tariff to account for recovery losses instead of the previous 100% recovery. Nepra also set annual targets for K-Electric to improve bill collection, with the aim to reach 96.5% by 2030.

However, the Ministry of Energy opposed the proposed recovery allowance and recommended a lower recovery ratio, starting with 96.7%.

The overall average tariff for K-Electric in FY24 is Rs39.97 per unit, factoring in power purchase, transmission, distribution, and supply margins.

K-Electric will source 48% of its power from the national grid, 42% from its own generation and 9.9% from private suppliers. Nepra has set K-Electric’s revenue requirement at Rs606.92 billion for FY24, including costs for recovery loss and operations.

Separately, Nepra approved K-Electric’s two solar projects with a combined capacity of 150MW. The projects will generate cost savings of Rs2.3 billion annually and foreign exchange savings of $17.01 million each year, totaling $425.2 million over their lifespan.