Loss-making Disco on sell-off list: IESCO seeks over 54pc hike in tariff for CY27

Islamabad Electric Supply Company (IESCO), a loss-making power distribution entity, has requested a 54% tariff increase to Rs43.54 per kWh for calendar year 2027, beginning January. This proposal was disclosed by IESCO CEO Engineer Chaudhry Khalid Mahmood during a public hearing with the National Electric Power Regulatory Authority (NEPRA).

The increase aims to rectify the company's financial situation before privatisation. IESCO's CFO informed the Authority that the Privatisation Commission mandated the company to clean up its balance sheet before offering it to private investors. However, NEPRA members raised concerns about the proposed methodology, questioning why the adjustments should be implemented all at once instead of in phases.

The hearing also delved into IESCO's operational performance, particularly its installation of Advanced Metering Infrastructure (AMI) meters, with one member suggesting the approach should initially target areas with higher electricity theft. Additionally, the company's provision of electricity to Azad Jammu and Kashmir (AJ&K) was scrutinized, with one intervenor arguing that the financial burden should be met through government subsidies rather than increased tariffs.

The proceedings also examined Hyderabad Electric Supply Company (HESCO) and Sukkur Electric Power Company (SEPCO) tariff petitions, with HESCO's CEO presenting a positive assessment but facing challenges from an opposition legislator. SEPCO's low recovery rate and high transmission and distribution losses drew criticism, raising doubts about its viability and attractiveness to potential investors.

The government's plans to privatise selected power distribution companies will now rely on NEPRA's assessment of the proposed tariff increases and performance critiques.