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K-Electric asked to refund Rs7.43/unit to consumers

The Nepra directed the K-Electric to refund Rs7.43 per unit to its power consumers

By Israr Khan
January 12, 2023
K-Electric asked to refund Rs7.43/unit to consumers. Representational image
K-Electric asked to refund Rs7.43/unit to consumers. Representational image

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Wednesday directed the K-Electric to refund Rs7.43 per unit to its power consumers while the state-run power distribution companies (Discos) were allowed to collect Rs0.189/unit additional from its clients in January 2023 bills on account of their monthly fuel charges adjustments (FCAs) for November 2022.

The power regulator issued two separate decisions for the Karachi-based power facility and all other Discos and with their implementation, Karachiites will get a refund of Rs10.617 billion in their January 2023’s power bills. This is the fifth month in a row since July 2022 that the regulator has instructed the K-Electric to reimburse the consumers’ specified per-unit charges.

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). Nepra has also clarified in the decision that negative adjustment on account of FCA is also applicable to domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.

K-Electric had also requested the release of Rs546 million, withheld on account of Economic Merit Order (EMO) violations for the period from June 2021 to September 2022.

During the hearing on the company’s petition held on Dec 27, 2022, the Authority directed to conduct a meeting with KE to discuss the reasons for the amount withheld to date and finalise the issue accordingly. As such, the claimed amount of Rs546 million has been withheld from the FCA claim of KE for November 2022 until the issue is finalised.

Interestingly, in its earlier decision for October’s FCA, Nepra had decided to refund Rs2.456 per unit to consumers in their December bills and it was being paid back and had a total impact of Rs4.11 billion on the company.

Regarding the FCA for September 2022, 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, the KE was directed to refund Rs4.886/unit to consumers in October bills having an impact of around Rs8.5 billion. Likewise, for July 2022’s FCA, the regulator asked the KE to pay back Rs4.117/unit in September 2022 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.

A spokesperson of the company said, “November’s FCA was lower primarily due to a reduction in the prices of RLNG, furnace oil, and power purchased from CPPA-G [Central Power Purchasing Agency-Guaranteed] by 18 percent, 15 percent, and 37 percent respectively as compared to September 2022.”

The FCA is incurred by utilities due to global variations in the fuel prices used to generate electricity and change in the generation mix. Furthermore, the consumers also get benefits when fuel prices decline as compared to the reference month.

In the decision for Discos, the authority has also issued an additional note, especially regarding the low RLNG supply to power plants in November and running costly RFO-based power plants.

The note said that the power plants of National Power Parks Management Company Limited at Haveli Bahadur Shah (HBS) and Baloki are included in the most efficient plants of power sector. The efficiency of these power plants is above 61 percent. The utilisation factors of these most efficient RLNG power plants i.e. HBS around (75.44 percent) and Baloki around (31.16 percent) in November 2022. It is noted that the accumulated claim by these power plants against part load operation is Rs1.458 billion.

On the other hand, average load management to the tune of around 2,700 MW has been carried out during the month. The full utilisation of these power plants could minimise the load-shedding on the one hand while on the other hand, it could help avoid part load charges of Rs1.458 billion.

It further said that as per the data submitted by National Power Construction Corporation (NPCC), the average RLNG allocated to the power sector in November 2022 was 292 million cubic feet per day (MMCFD), whereas the average consumption was 229 MMCFD. However, due to less allocation of RLNG to the power sector during some days in the month, RFO plants were operated to meet with the system demand, which resulted in an indicative financial impact of Rs63.82 million.

It advised that efforts should be made to improve the supply chain of RLNG to fully utilise the most efficient RLNG power plants and avoid the part load adjustment charges.