THE request by K-Electeric (KE) to raise base tariffs, including allowances for future inefficiencies, highlights a deeper structural flaw in the country’s power sector: a system that actually rewards poor performance while penalising the public. When a utility asks for guaranteed margins while shifting its future losses onto the consumers, it removes any incentive to improve efficiency or reduce losses. Instead, the burden is unfairly passed on to those segments that have the least capacity to absorb it.

Higher tariffs disproportionately hurt low-income and marginalised communities. Unable to pay, they fall into cycles of non-payment and disconnection, or resort to unsafe, informal connections. This creates a self-reinforcing loop of ineffi-ciency and inequity.

One potential fix is to mandate net-metering parity, requiring KE to pay solar users the same rate it charges them. This would force the utility to compete on service and cost, rather than relying on regulatory shields. Paired with clear policies on solar panel recycling and environmental compliance, such reforms can shift us towards a fairer, greener and more accountable energy system.

Meanwhile, as solar adoption grows, we also need clear policies for solar panel end-of-life (EoL) management to prevent future environmental burdens. Reforming net-metering payouts and linking them with utility performance could be the first step in this overdue transition.

Rather than perpetuating a cycle of guaranteed returns and pass-through costs, we must align financial incentives with performance and sustainability.

Hasan Raza
Karachi

Published in Dawn, June 23rd, 2025