Inconsistencies in Rs332bn grid revenue flagged

A National Electric Power Regulatory Authority member has raised concerns over inconsistencies in the recently approved Rs332 billion revenue requirement for Pakistan's national grid, citing discrepancies in receivables and non-transferred assets. In a detailed dissenting note, Nepra member Amina Ahmed pointed out the financial inconsistencies in the regulator's 2-1 majority decision to approve the revenue requirement for National Grid Company (NGC) over three years, from FY2022-23 to FY2024-25.

The NGC's initial sought revenue was Rs478 billion, but the regulator ultimately approved Rs332 billion, with Rs81.5 billion for FY23, followed by a 17% increase to Rs95.6 billion for FY24 and a 62% increase to Rs155 billion for FY25. The member challenged the treatment of over Rs19 billion recorded as payable to Central Power Purchasing Agency (CPPA) under current liabilities in NGC's financial statements for 2023-24.

Under the 2015 business transfer agreement, CPPA received assets and liabilities pertaining to the Market Operations Undertaking, leading to a net payable. Ahmed argued that the amount should not be treated as a loan, as it represents the mirror image of an asset not transferred to CPPA. Consequently, she asserted that the amount cannot be equated with long-term loans employed for financing NGC's assets, as recognizing one without the other leads to a distorted equity amount.