ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has sought a comprehensive recovery plan from the Tribal Areas Electricity Supply Company (TESCO) in anticipation of potential government withdrawal of tax exemptions for industrial consumers and the metering of domestic consumers.
This inquiry arose during NEPRA’s review of TESCO’s five-year (2025-26 to 2029-30) Investment and Business Plan, which includes an approved investment of Rs. 14 billion. Currently, TESCO supplies electricity for four hours daily to non-metered domestic consumers, with their bills covered by federal budget allocations. Meanwhile, industrial consumers are exempt from load shedding due to their consistent bill payments.
NEPRA Chairman Waseem Mukhtar questioned TESCO’s preparedness for scenarios such as the withdrawal of tax exemptions for industry and the rollout of metering for domestic users. He emphasized the need for third-party verification of losses claimed by distribution companies (Discos) as part of regulatory determinations.
TESCO’s metering system remains limited to 11 kV feeders, leaving most domestic consumers without meters. NEPRA urged TESCO to expedite metering efforts at both consumer and Continuous Development Plan (CDP) levels while scrutinizing the company’s projected 6% annual growth in its investment plan.
TESCO’s previous investment plan faced underutilization due to delays in funding from federal and provincial governments, as well as the lack of domestic metering. Such delays, including stalled transmission grid projects, have led to increased costs for consumers.
TESCO CEO reported significant improvements in the recovery rate, rising from 58% in 2021 to 95% among metered consumers in December 2024. Recovery from metered billing reached Rs. 7.5 billion, marking a historic milestone.
However, the CEO acknowledged ongoing challenges, including a court case related to tax issues in FATA, with Rs. 650 million deferred. Speculation suggests FATA may retain tax exemptions until 2028, though the Federal Board of Revenue (FBR) is unlikely to extend exemptions, particularly for industry, beyond July 2025.
The CEO assured NEPRA that the installation of meters at all CDP points would be completed by June 2025. Civil works are finished, and procurement of electrical equipment and meters is underway. A consultancy for Transmission and Distribution (T&D) loss calculations has been awarded to the Barqaab-PPI-OMS Consortium, with a field survey currently in progress. The T&D loss study is expected to conclude within the 2024-25 fiscal year, with findings to be shared with NEPRA.
NEPRA’s focus on TESCO’s financial performance and metering progress reflects the regulator’s broader objective to enhance transparency and efficiency in Pakistan’s power distribution sector.
Story by Mushtaq Ghumman
