Audit flags inconsistencies in PKR 332bn national grid revenue

A member of the National Electric Power Regulatory Authority (Nepra) has raised concerns over regulatory and accounting inconsistencies in the approval of the National Grid Company's (NGC) PKR 332 billion revenue requirement for FY2022-23 to FY2024-25.

 

In a dissenting note to the regulator's 2-1 majority decision, Nepra Member (Tariff and Finance) Amina Ahmed argued that the approved revenue calculation did not properly account for corresponding receivables linked to liabilities transferred to the Central Power Purchasing Agency (CPPA), potentially understating the company's equity and reducing its allowable return.

 

The majority decision approved a combined revenue requirement of PKR 332 billion—well below the PKR 478 billion sought by the NGC—and set revised Use of System Charges (UoSC) for the three-year period.

 

Ahmed questioned the treatment of more than PKR 19 billion recorded as payable to the CPPA, saying the liability was effectively treated as a loan without recognising the matching receivable arising from the 2015 Business Transfer Agreement. She argued that recognising the liability without its corresponding asset distorted the company's financial position.

 

According to the dissenting note, either both the liability and receivable should be netted off or both excluded from the equity calculation. Treating only one side of the transaction, she said, results in an inaccurate assessment of the NGC's financial base and the return permitted under Nepra's tariff framework.