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K-Electric ready to refund Rs1.883/unit under FCA, Rs7.833/unit under QTA to consumers

By Israr Khan
November 19, 2022

ISLAMABAD: The K-Electric has shown its willingness to the National Electric Power Regulatory Authority (Nepra) that it is ready to pay Rs1.883/unit to the power consumers in December 2022 bills after the facility charged Karachi consumers a higher price in their October electricity bills.

Besides, under the Quarterly Tariff Adjustment (QTA) for July-September 2022, it also submitted to the regulator that it may be allowed to refund Rs7.833/unit to its clients.

The company has submitted its applications to the power regulator, which would hold a public hearing on it on November 30, 2022, to know if the requested monthly and quarterly fuel charges variation was justified and whether the company had followed the economic merit order (EMO) while giving dispatch to its power plants and power purchases from private power suppliers.

Under the tariff mechanism, the quarterly tariff adjustments are made on account of variations in the power purchase price, capacity charges, variable operation and maintenance costs and use of system charges, including the impact transmission and distribution losses, which are built into the base tariff by the federal government.

Meanwhile, the K-Electric spokesperson said, “The impact of quarterly adjustments is usually not passed on to the consumers under the uniform tariff policy applicable across the country. However, the final decision rests with the Federal Ministry of Energy, the Government of Pakistan, and the Nepra authority.”

He further said that the negative FCA for October 2022 is primarily due to a decrease in the prices of RLNG, furnace oil, and power purchased from CPPA-G [central power purchasing agency]. “The price of RLNG in October 2022 decreased by 16 percent from September 2022. The price of furnace oil in October 2022 has decreased by six percent from September 2022, and the price of power purchased from CPPA-G in October 2022 has decreased by six percent from September 2022,” he said.

If the regulator accepts the plea of K-Electric, then this adjustment/ relief will be available to all user categories of the KE except lifeline power consumers, domestic consumers consuming up to 300 units, and agricultural consumers and electric vehicle charging stations (EVCS).

It may be noted that on account of FCA for September 2022, the Nepra had directed the K-Electric to refund Rs5.126/unit to clients in their November bills, which had an impact of around Rs9 billion on the company.

For August’s FCA, the Nepra had directed the KE to refund Rs4.8862/unit to consumers in October 2022 bills. Likewise, for July 2022’s FCA, the regulator asked the KE to refund Rs4.117/unit in September 2022 bills.

While for June 2022’s FCA, the Nepra had allowed the utility to collect an additional Rs11.102/unit in electricity bills for August and September 2022, with a combined impact of Rs25 billion. For May’s FCA too, it had asked the KE to charge an extra Rs9.518/unit in two months, including Rs2.6322/unit in July and Rs6.886/unit in August bills.

On October 24, 2022, the Nepra allowed the K-Electric to collect an additional Rs12.6818 per kWh from the power consumers on account of quarterly adjustments for April-June 2022.

On the other hand, ex-Wapda distribution companies (XWDISCOs) have also submitted a petition to the Nepra, seeking permission for charging an additional Rs0.2457/unit from the power consumers on account of monthly Fuel Charges Adjustment (FCA) for October 2022. On the Discos’ petition, the Nepra will hold a public hearing on November 29.

On account of September’s FCA, the regulator had allowed the state-run power distribution companies (Discos) to charge an additional Rs0.0819/unit in the billing month of November. For August, the Nepra increased FCA by Rs0.1918/unit and it was collected in October.

For July, the regulator raised FCA by Rs4.34/unit and was collected in September 2022 bills and had a total impact of Rs69 billion, including GST. For June 2022, the Nepra had allowed Discos to collect a whopping Rs9.8972/unit additional amount in their billing month of August. This had a total impact of Rs156 billion, including GST.

According to the latest petition filed by the central power purchasing agency (CPPA-G) on behalf of Discos, total electricity of 10,705 GWh was generated in October 2022, at a cost of Rs96.567 billion. After selling 32.86 GWh to IPPs and 294.8 GWh as transmission losses, the net electricity delivered to Discos was 10,377.26 GWh, said the petition.

As per the data, hydel generation was 3,143.62 GWh constituting 29.37 percent. Power generation from coal-fired power plants was 1,656.5 GWh in October 2022, which was 15.47 percent of total generation. The coal-based generation cost Rs17.614/unit, while the generation from HSD was zero. Generation from RFO was 1,56.57 GWh (1.46 percent of total generation) at Rs33.7/unit. Electricity generation from gas-based power plants was 1,296.4 GWh (12.11 percent) at Rs10.649/unit. Generation from RLNG was 1,843.7 GWh (17.22 percent of total generation) at Rs24.22/unit. Electricity generation from nuclear sources was 2,206.33 GWh at Rs1.0678/unit (20.61 percent of total generation), and electricity imported from Iran was 47.77 GWh at Rs21.1755/unit. The Nepra is approving the cost provisionally because the agreement between Pakistan and Iran has expired.

Power generation from different sources (mixed) was 14.77 GWh at a price of Rs4.597/unit, and generation from bagasse was recorded at 37.8 GWh at a price of Rs5.9822/unit. The energy generated from wind was recorded at 222.36 GWh, 2.08 percent of total generation, and solar at 79.1 GWh, 0.74 percent of total generation in October 2022.