PTBP Web Desk
The National Electric Power Regulatory Authority (NEPRA) has sought a comprehensive recovery plan from the Tribal Areas Electricity Supply Company (TESCO) in the event of the government withdrawing tax exemptions for industrial consumers and implementing metering for domestic consumers. This inquiry was raised during NEPRA’s scrutiny of TESCO’s five-year Investment and Business Plan for 2025-30, which includes an approved investment of Rs 14 billion.
TESCO currently supplies electricity to domestic consumers without meters for only four hours daily, while industrial consumers are exempted from load-shedding due to their consistent bill payments. The federal government subsidizes the bills for non-metered domestic consumers through the national budget. NEPRA’s Chairman, Waseem Mukhtar, questioned TESCO’s preparedness for potential policy changes, asking:
“What are the plans TESCO has, in case tax exemptions to industry are withdrawn by the government and what about meters installed for domestic consumers?”
TESCO’s metering infrastructure currently extends only to 11 kV feeders, leaving most domestic consumers without meters. NEPRA urged the company to accelerate metering at both consumer and Continuous Development Plan (CDP) levels to enhance transparency and efficiency. Concerns were also raised about the 6% annual growth rate projected in TESCO’s investment plan, especially given that previous plans were underutilized due to funding constraints and delays in project execution.
Delays in essential projects, such as transmission grid developments, have resulted in negative cost impacts on consumers. NEPRA also sought an explanation regarding TESCO’s financial performance, including its free cash flow position.
TESCO’s Chief Executive Officer (CEO) highlighted significant improvements in recovery rates. Starting from a recovery rate of 58% in 2021, the company now boasts a 95% recovery rate among metered consumers. In December 2024, the recovery rate reached a historic 94.4%, with Rs 7.5 billion collected against the same amount billed. This marks a notable achievement for the company.
The CEO acknowledged the ongoing challenges related to taxes in the Federally Administered Tribal Areas (FATA), where approximately Rs 650 million remains deferred due to a court case. While there is speculation that FATA might retain tax exemptions until 2028, the CEO expressed doubts about the Federal Board of Revenue (FBR) extending these exemptions, particularly for industrial consumers, beyond July 2025.
TESCO has outlined plans to complete the installation of meters at all CDP points by June 2025. Civil works for this initiative are already complete, with electrical equipment and meter procurement currently underway. The company has also engaged consultancy services through the Barqaab-PPI-OMS Consortium to calculate transmission and distribution (T&D) losses. A field survey is in progress, and the T&D loss study is expected to be finalized within the current fiscal year. The results will be shared with NEPRA upon completion.
NEPRA stressed the importance of expediting metering initiatives and ensuring timely completion of development projects to mitigate financial and operational inefficiencies. The regulator also underscored the need for transparency in TESCO’s financial performance and planning.
The proposed withdrawal of tax exemptions and the push for universal metering represent significant challenges for TESCO. However, they also offer an opportunity to enhance operational efficiency and establish a more sustainable and equitable electricity supply framework.
