Fuel charges for March 2023: K-Electric to levy Rs3.9/unit extra on consumers

ISLAMABAD: Karachi residents are set to face a significant financial burden, as the National Electric Power Regulatory Authority (Nepra) has permitted K-Electric to levy an extra charge of Rs3.9342/unit on consumers in May 2023 for monthly Fuel Charges Adjustments (FCA) for March 2023.

This will translate into a staggering burden of Rs5.814 billion on the city’s already-strained electricity consumers in just one month.

This monthly upward adjustment will be applicable to all the consumer categories except Electric Vehicle Charging Stations (EVCS) and Lifeline consumers of K-Electric.

Nepra held a public hearing on May 3 to address a petition from the Karachi-based utility, which requested an increase of Rs4.49 per unit on account of FCA for March 2023. The proceedings were chaired by Nepra Chairman Tauseef H Farooqi, with other authority members in attendance.

The company in its request has also included 6.019GWh for the net metering units procured during March 2023. The authority considered this energy as part of the FCA for the month of March 2023.

K-Electric (KE) has reported a significant financial loss of Rs242.43 million due to billing corrections made by Sui Southern Gas Company (SSGC) regarding the gas quota of indigenous gas and RLNG that were delivered in February 2023. However, the National Electric Power Regulatory Authority (Nepra) has addressed this loss and included it in the decision.

Furthermore, as part of the FCA claim, an amount of Rs1.42 million has been provisionally withheld due to out-of-merit dispatch given to Lotte on March 15-16, 2023. Nepra asked for further details and clarification from K-Electric (KE) to address any concerns and ensure compliance with regulations.

Concerns have been raised by commentator Tanveer Barry regarding the high Fuel Charges Adjustments (FCA) expected during the summer of 2023. K-Electric responded by stating that the inclusion of Bin Qasim Power Station 3 (BQPS-III) will lead to an overall reduction in generation costs.

Commentator Imran Shahid has submitted that K-Electric (KE) should not continue operating inefficient power plants that have exceeded their useful lives, as they are resulting in higher generation costs. In response, KE stated that its overall generation fleet efficiency has been improved from 30 percent to 48 percent over the last 15 years. KE further clarified that BQPS-I unit-1 and unit-2 will be decommissioned within the next three months, and unit-5 and 6 will only be operated if they meet the economic merit order (EMO) to meet load requirements.