Unsustainable Perks and Privileges in Power Sector : Unexplored cause of high electricity tariffs.

In Pakistan’s power sector, public entities such as GENCOs, TRANSCO, and DISCOs offer essential benefits like pensions, free electricity, and medical care to retired employees. However, these costs should not be treated as direct expenses of their services.

To manage these financial liabilities effectively, a dedicated fund is essential. Currently, many entities charge these costs to electricity tariffs, distorting the true cost of generation and placing an undue burden on consumers. The financial strain from these benefits is growing due to an increasing number of retirees and rising electricity and healthcare costs.

As the workforce ages, the demand for pensions and medical care escalates, exacerbated by higher service rates. Over the past year, the expenses related to pensions, free electricity, and medical services in public sector DISCOs are detailed below

The Numbers Tell the Story
From FY 2018–19 to FY 2022–23, the combined employee-related perks of just a few DISCOs ballooned dramatically:
PESCO (Peshawar Electric) → rose from Rs 4.9 billion in FY 2018-19 to Rs 8.9 billion in FY 2022-23 — an 80 % increase in five years.
IESCO (Islamabad Electric) → increased from Rs 1.6 billion to Rs 4.1 billion, a three-fold rise.
GEPCO (Gujranwala Electric) → climbed from Rs 2.9 billion to Rs 4.9 billion.
LESCO (Lahore Electric) → from Rs 6.9 billion to Rs 10.1 billion.
FESCO (Faisalabad Electric) → from Rs 4.6 billion to Rs 7.6 billion.
MEPCO (Multan Electric) → from Rs 4.0 billion to Rs 14 billion — nearly tripled.
QESCO (Quetta Electric) → from Rs 0.9 billion to Rs 1.6 billion.

Across all entities, the total runs into tens of billions annually, much of which is embedded in the per-unit electricity cost paid by ordinary consumers.