Business Recorder
ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has approved a Distribution Investment Plan (DIP) of Rs 2.818 billion, along with provisional transmission and distribution (T&D) loss targets, for Hazara Electric Supply Company Limited (HAZECO) for FY 2025-26, against the company’s revised proposal of Rs 4.268 billion. HAZECO had initially submitted its DIP on June 14, 2025, proposing a total investment of Rs 5.363 billion, to be financed through a mix of internal resources and consumer contributions. Following the observations by the regulator, the company later revised the plan downward to Rs 4.268 billion through a submission dated February 11, 2026. NEPRA undertook a comprehensive review of HAZECO’s operational data, including energy sales, consumption trends, peak load, load factor, and system losses. The Authority also considered the company’s recent bifurcation from Peshawar Electric Supply Company (PESCO), along with its existing network configuration and geographic coverage. READ MORE: Nepra approves Rs42.577bn DIP for PESCO for 2025–2029 During evaluation, NEPRA observed that the submitted investment plan did not adequately reflect the actual operational conditions of the network. Several grid stations and transmission and distribution assets were found to be underutilised or operating below optimal levels. The Authority cautioned that approving the plan in its original form could further increase inefficiencies and place additional burden on consumers through higher tariffs. The regulator also identified gaps in the plan, including weaknesses in need assessment, cost-benefit analysis, submission of Bills of Quantities (BoQs), and evaluation of tariff impact. It stressed the need for better alignment with regulatory frameworks such as the Grid Code, Distribution Code, Performance Standards Rules, and Planning Guidelines. NEPRA emphasised that improved planning, accurate demand forecasting, better engineering design, and optimal utilisation of existing infrastructure could significantly reduce investment requirements without compromising system reliability. The public hearing on the matter was held on September 10, 2025, at NEPRA headquarters, with participation from stakeholders both in person and online. HAZECO was represented by its Chief Executive Officer along with officials from its technical and finance teams. The Authority noted that distribution companies are allowed to recover Return on Rate Base (RoRB) based on the Weighted Average Cost of Capital (WACC), including return on equity and cost of debt, along with depreciation to cover the principal repayment. HAZECO informed the Authority that it plans to arrange Rs 3.811 billion during FY 2025-26 through RoRB and depreciation to finance its investment plan. However, after detailed scrutiny, NEPRA approved a reduced DIP of Rs 2.818 billion for HAZECO’s transmission and distribution business for FY 2025-26, subject to specific terms and conditions outlined against each issue. Copyright Business Recorder, 2026
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