CFO highlights efficiencies in KE’s operations to prevent potential tariff increase
The Chief Financial Officer (CFO) of K-Electric (KE) has revealed that without operational efficiencies, the utility’s tariff could have been up to Rs17 higher. This statement came during a public hearing where KE presented a seven-year investment plan to improve its infrastructure.
KE plans to invest $2 billion over the next seven years, aiming to enhance its operational efficiency and reduce distribution losses through technological upgrades and capital investments. The current power tariff is Rs34 per unit, and KE seeks to raise it to Rs44.69 per unit under this plan. However, the increase will not be passed on to consumers, as the government provides subsidies to maintain a uniform tariff across the country.
During the public hearing, KE’s CFO emphasized the importance of long-term financial planning for significant operational and capital expenditures necessary to modernize the utility’s infrastructure. The utility’s strategy focuses on a seven-year tariff control period, aligning with regulatory frameworks to provide stability for financial and operational planning.
Stakeholders expressed concerns about possible tariff increases but recognized the necessity for substantial investment in Karachi’s power infrastructure. NEPRA Member of Tariff & Finance reassured that the proposed adjustments are designed to fund infrastructure improvements and are not directly linked to consumer billing rates.
The hearing also addressed recent complaints about load shedding in Karachi, with NEPRA investigating these claims for prompt resolutions. Despite political grandstanding and tangential topics, NEPRA chairman and members emphasized the need to focus on KE’s specific proposals and the utility’s commitment to transparency and regulatory compliance.
Overall, KE’s efforts to enhance operational efficiency and reduce system losses are crucial for improving service reliability and ensuring financial sustainability while protecting consumer interests.