The National Electric Power Regulatory Authority (Nepra) has authorised K-Electric to collect an additional charge of Rs0.5794 per unit from power consumers on their April bills
ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has authorised K-Electric to collect an additional charge of Rs0.5794 per unit from power consumers on their April bills.
This increase is on account of the monthly fuel charges adjustments (FCA) for February 2023, a period during which consumers paid less than the actual energy cost of generation.
K-Electric had sought an increase of Rs1.66 per unit under fuel cost adjustment (FCA).
Following the decision, the Karachi-based power provider will levy an additional charge of Rs647 million on consumers in relation to the monthly fuel charges adjustments (FCA) for February. During that month, the utility charged its consumers lower prices, despite the actual per-unit cost being higher.
On Friday, the Nepra decision stated that this increase will apply to all consumer categories of K-Electric, except for Electric Vehicle Charging Stations (EVCS) and lifeline consumers.
The Power Purchase Agreement (PPA) signed between the National Transmission and Despatch Company (NTDC) and K-Electric on January 26, 2010 for the sale and purchase of 650MW on basket rates expired after a five-year term. Subsequently, in a meeting held on November 8, 2012, the Council of Common Interest (CCI) decided to reduce the supply of energy by 300MW from NTDC to K-Electric. However, K-Electric has contested this decision of the CCI through suits and petitions in the Sindh High Court. As of today, no new agreement has been signed between K-Electric and NTDC, and K-Electric is currently drawing 1,100 MW of power from the national grid.
It is noteworthy that following the discontinuation of the zero-rated industrial support package subsidy on March 1, 2023, consumers will not receive any fuel charges adjustment (FCA) relief in the billing month of March 2023 (for FCA of Jan-23) and subsequent months.
At the public hearing on the K-Electric petition on March 30, 2023, commentator Tanveer Barri suggested that KE’s service territory should not experience load shedding during the upcoming summer, as the company has added new plants to its generation capacity. Barri also questioned whether KE is planning to sign a new contract for additional generation from the national pool. The Authority responded that it is not aware of any such development, but KE confirmed that it is in talks with CPPA-G on the matter.
Another commentator Arif Bilwani expressed concern that KE should not have added imported fuel-based plants to its generation capacity, when it could have instead harnessed indigenous sources. Bilwani also inquired about the nature of the new contract between CPPA-G and KE, whether it would be based on a marginal rate or not. The Authority replied that the contract has not been finalized, and they are not aware of any progress made on it.