Nepra decision: K-Electric directed to refund Rs2.45/unit in December bills

ISLAMABAD: K-Electric’s clients, who paid higher rates for electricity they consumed in October 2022, are to get Rs2.456/unit refund in their December bills, as per the decision of the National Electric Regulatory Authority (Nepra) on Wednesday.

This reimbursement is to be made on account of fuel charge adjustments (FCA) for October 2022. The company charged higher prices from consumers during the month, while the per unit cost of generation was lower. After this decision, the Karachi-based facility would reimburse Rs4.11 billion to its clients in one month.

On November 30, Nepra held a public hearing on the application of K-Electric to know if the requested monthly 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.

This adjustment/relief would be available to all user categories of KE except lifeline power consumers, domestic consumers consuming up to 300 units, agricultural consumers and electric vehicle charging stations (EVCS). The power regulator also clarified that negative adjustment on account of monthly FCA is also applicable to domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.

This is the fourth month in a row since July 2022 the regulator has instructed K-Electric to reimburse the consumers for higher prices charged in previous months.

Regarding the FCA for September 2022, the Nepra had directed K-Electric to refund Rs5.126/unit to clients in their November bills with an impact of around Rs9 billion on the company.

For August’s FCA, KE was directed to refund Rs4.8862/unit to consumers in October 2020 bills having an impact of around Rs8.5 billion. Likewise, for July 2022’s FCA, the regulator asked KE to pay back Rs4.117/unit in September 2020 bills.

While for June 2022’s FCA, 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.

Meanwhile, the spokesperson of K-Electric said FCAs are dependent on changes in global prices of fuel and are passed on to consumer bills under the prescribed rules and regulations of Nepra and the government.

He further said that the negative FCA for October 2022 was primarily due to a decrease in 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 6 percent from September 2022, and the price of power purchased from CPPA-G in October 2022 has decreased by 11 percent from September 2022,” he said.