Nepra Concerned over GEPCO’s Investment Plan
Staff Report:
The National Electric Power Regulatory Authority (NEPRA) has expressed reservations about the Gujranwala Electric Power Company (GEPCO)’s proposed Rs100 billion five-year investment plan.
The utility had submitted a petition to the Regulator asking for allowing it this huge amount under its proposed Distribution Integrated Investment Plan from FY2025-26 to 2029-30.
The regulator on Wednesday held a public hearing on its petition chaired by NEPRA Chairman, focused on GEPCO’s investment plan amidst growing concerns about its financial stability and the efficiency of its operations.Nepra Reduces Power Tariff Up to Rs 1.28 Per Unit
The NEPRA authority raised multiple questions regarding GEPCO’s performance during fiscal year 2023-24, pointing to the increase in transmission and distribution losses, poor recovery rates, and the potential impacts of privatization efforts on the company’s operations.
Despite a declining demand for electricity, NEPRA questioned the necessity of such a large investment in the current economic environment, which could strain consumer finances without delivering adequate relief. The authority urged GEPCO to justify the proposed investments with a more reasonable and cost-effective plan that would not burden consumers further.
NEPRA also expressed concern over delays in the completion of approved projects from previous years, which have raised doubts about the company’s ability to execute the proposed investment effectively. Additionally, NEPRA noted that GEPCO plans to finance the Rs100 billion investment without sufficient available cash flow, further adding to the skepticism regarding the project’s viability.
In response, the NEPRA authority directed GEPCO’s CEO to reconsider the investment plan, focusing on efficiency improvements and better financial management to ensure that consumers receive tangible benefits from any future investment. The authority emphasized that GEPCO must address these critical issues before moving forward with such a significant financial undertaking.
