The National Electric Power Regulatory Authority (Nepra) has slapped a Rs25 million fine on the Lahore Electric Supply Company (Lesco) for failing to meet its loss reduction and recovery targets during fiscal year 2023–24, despite being allowed an investment of Rs163 billion for system improvement.
The fine follows Nepra’s review of the Circular Debt Report for June 2024, which revealed that power distribution companies (DISCOs) collectively performed below expectations. Instead of improvement, overall transmission and distribution (T&D) losses increased while electricity purchases slightly declined further worsening the circular debt crisis in the power sector.
Key Details of Nepra Findings
| Indicator | FY23 | FY24 | Change/Impact |
| Total Power Purchases (DISCOs) | 116,314 GWh | 115,142 GWh | ↓ 1% |
| Average T&D Losses (All DISCOs) | 16.84% | 18.31% | ↑ 1.47% |
| Allowed Loss Target | 11.77% | — | Exceeded by 6.54% |
| Circular Debt Contribution | — | Rs276 billion | — |
| Lesco T&D Losses | 11.88% | 15.92% | ↑ 4.04% |
| Lesco Financial Losses | Rs25.8 billion | Rs47.6 billion | ↑ 84% |
During the hearing, Lesco admitted that overbilling practices had diverted its officers’ attention from operational performance, citing ongoing inquiries by law enforcement agencies. Nepra stated this admission validated the allegations made in its show-cause notice.
“Lesco failed to provide a satisfactory justification for its poor performance and operational negligence,” Nepra said in a statement. “The company’s inefficiency has not only caused financial losses but also burdened consumers.”
Nepra highlighted that despite being allocated Rs163.1 billion for network upgrades, most DISCOs including Lesco failed to achieve measurable improvements. The fine has been imposed under the Nepra Fine Regulations 2021, signaling stricter accountability measures in the power sector.
Analysts suggest the move underscores the regulator’s intent to tighten oversight on distribution companies as part of efforts to control circular debt, which continues to strain Pakistan’s energy finances.