Pakistan Power Sector Crisis has once again taken center stage after the latest Performance Evaluation Report (PER) FY 2024–25 released by the National Electric Power Regulatory Authority (NEPRA). The findings reveal deep-rooted structural inefficiencies, soaring financial losses, weak governance, and growing public frustration painting a sobering picture of Pakistan’s electricity distribution landscape.
With estimated financial losses of Rs. 265 billion due to transmission and distribution (T&D) inefficiencies alone, the report highlights how the sector continues to drain national resources despite repeated reform commitments.
Pakistan Power Sector Crisis: The Rs. 265 Billion T&D Loss Problem
Transmission and distribution losses remain one of the most pressing drivers of the Pakistan Power Sector Crisis. Despite NEPRA’s directives to bring losses within prescribed limits, not a single distribution company (DISCO) met its target in FY 2024–25.
The largest contributors to the Rs. 265 billion shortfall were:
• Peshawar Electric Supply Company (PESCO) – Rs. 87.48 billion
• Quetta Electric Supply Company (QESCO) – Rs. 52.41 billion
• Sukkur Electric Power Company (SEPCO) – Rs. 36.04 billion
• Lahore Electric Supply Company (LESCO) – Rs. 35.17 billion
Meanwhile, K-Electric reported a T&D loss of 14.73% against a 14.27% target under the current tariff determination. Although revised targets were approved under its 7-year investment plan (FY 2024–2030), the matter remains under adjudication in the Sindh High Court, leaving regulatory uncertainty unresolved.
NEPRA emphasized that billions of rupees were approved for feeder optimization, advanced metering infrastructure, and network strengthening. However, implementation gaps continue to undermine operational efficiency.
Recovery Crisis: Billing Gaps Fuel Circular Debt
Beyond physical losses, the Pakistan Power Sector Crisis is being aggravated by weak revenue recovery. While some companies such as:
• Islamabad Electric Supply Company (IESCO)
• Gujranwala Electric Power Company (GEPCO)
• Faisalabad Electric Supply Company (FESCO)
• Multan Electric Power Company (MEPCO)
achieved 100% recovery rates, others severely lagged behind.
QESCO recorded the lowest recovery rate at just 38.7%, though slightly improved from 31.79% last year. HESCO and SEPCO hovered near 74%, while K-Electric maintained a 90.56% recovery ratio but still carried Rs. 74.6 billion in unrecovered amounts.
Low recoveries contributed to an additional Rs. 132 billion loss, worsening Pakistan’s circular debt burden a chronic fiscal challenge impacting the broader economy.
Load Shedding Controversy and Legal Battles
The report sharply criticized ongoing load shedding despite adequate power allocations. Several DISCOs were found underutilizing available supply while resorting to outages a move NEPRA deemed a violation of regulatory standards.
Legal proceedings were initiated against:
• PESCO
• QESCO
• HESCO
• SEPCO
• K-Electric
Each was fined Rs. 50 million, with daily penalties imposed on SEPCO and HESCO. However, PESCO and K-Electric have secured stay orders from the Appellate Tribunal.
NEPRA also questioned the long-standing AT&C-based load-shedding policy, introduced in 2013. After 12 years, it has failed to meaningfully reduce aggregate technical and commercial losses, instead penalizing paying consumers.
Reliability Crisis: SAIFI and SAIDI Targets Missed
System reliability indicators SAIFI (frequency of interruptions) and SAIDI (duration of interruptions) showed widespread non-compliance. Not a single DISCO achieved SAIDI targets.
Frequent outages continue to disrupt industrial productivity, business continuity, and household stability directly undermining economic growth.
Delays in New Connections: 128,096 Consumers Still Waiting
Under Performance Standards (Distribution) Rules 2005, DISCOs must provide 95% of new connections within prescribed timelines. While some companies met the benchmark, MEPCO and K-Electric failed to connect 13–14% of applicants on time.
As of June 2025, 128,096 eligible consumers had paid but were still awaiting electricity connections, highlighting serious service delivery inefficiencies.
Consumer Complaints and Safety Concerns
In FY 2024–25, DISCOs recorded 7.42 million complaints. Notably, K-Electric accounted for 23% of total complaints, reflecting a structured reporting system. In contrast, SEPCO reported only 1,627 complaints raising questions about data transparency.
Safety performance also deteriorated, with 118 fatalities reported, including 80 members of the public. Investigations under Section 27A of the NEPRA Act revealed grounding and earthing failures as key contributors. NEPRA imposed fines and ordered corrective action plans, but compliance remains inconsistent.
The Reform Blueprint: Can Pakistan Fix Its Power Sector?
To address the Pakistan Power Sector Crisis, NEPRA has recommended:
• Restructuring large DISCOs into smaller, performance-driven units
• Accelerating privatization and public–private partnerships
• Phasing out AT&C-based load shedding
• Deploying advanced digital monitoring systems
• Strengthening consumer protection and complaint redressal mechanisms
• Enhancing accountability and governance frameworks
The message is clear: incremental fixes are no longer sufficient. Structural reform is imperative.
Final Word
The Pakistan Power Sector Crisis is no longer just an operational issue it is an economic risk. High T&D losses, poor recoveries, unreliable supply, safety lapses, and governance weaknesses collectively threaten fiscal stability and public trust.
The coming years will determine whether reform momentum materializes into measurable transformation or whether the crisis deepens further, adding pressure to an already strained national economy.