How it unfolded
In recent years, Lahore Electric Supply Company (LESCO) has been under scrutiny for its performance and compliance with regulatory standards set by the National Electric Power Regulatory Authority (Nepra). Despite reporting some improvements in operational metrics, LESCO has consistently fallen short of the performance benchmarks established by Nepra, raising concerns about its overall effectiveness in managing electricity distribution in Lahore.
As of June 2025, LESCO reported a reduction in transmission and distribution (T&D) losses from 15.8% to 13.4%. However, these figures still do not meet Nepra’s stringent requirements, which mandate that losses must decrease to 10% in the fiscal year 2023-24 and further to 9.46% in 2024-25. The actual losses reported were 15.92% and 13.7% for FY2023-24 and FY2024-25, respectively, indicating a significant gap between LESCO’s performance and regulatory expectations.
This shortfall in performance has had considerable financial repercussions. LESCO faced a financial impact of Rs39.4 billion in FY2023-24 and Rs35.17 billion in FY2024-25 due to its inability to meet the loss reduction targets. In October 2025, Nepra imposed a penalty of Rs25 million on LESCO for its excessive losses, further highlighting the regulatory body’s dissatisfaction with the company’s performance.
Despite these challenges, LESCO has reported a Rs23 billion improvement in recoveries, achieving nearly 100% year-end recovery rates. This indicates some progress in financial management, although analysts have noted that these reported savings reflect partial improvements rather than full compliance with regulatory targets. LESCO’s reporting has been criticized for focusing on selected financial metrics while omitting broader performance indicators, which may obscure the true state of its operational efficiency.
Reliability indicators for LESCO remain above targets, with System Average Interruption Frequency Index (SAIFI) at 28.16 against a target of 13. Additionally, the System Average Interruption Duration Index (SAIDI) is reported at 2,982.94 minutes, significantly higher than the allowed 14 minutes. These figures suggest that while LESCO has made strides in certain areas, it still struggles with reliability and service continuity.
As of mid-2025, approximately 28,984 connections were pending, indicating a backlog that could affect customer satisfaction and service delivery. Furthermore, LESCO’s fault rates per kilometer are the highest among distribution companies, raising questions about the infrastructure’s integrity and maintenance practices.
In summary, while LESCO has made some progress in reducing T&D losses and improving recovery rates, the company continues to face significant challenges in meeting Nepra’s regulatory benchmarks. The ongoing fluctuations in recovery ratios, accumulation of receivables, and limited reduction in overdue amounts have been noted by Nepra, emphasizing the need for sustained improvement and compliance with single-digit targets to meet regulatory standards.