Why surcharge slapped on KE consumers for a year

ISLAMABAD: K-Electric consumers got cheaper electricity from July 2019 to September 2020 as they did not pay the quarterly tariff adjustments (QTAs) during the said time. To this effect, the Economic Coordination Committee (ECC) allowed the utility company to recover Rs24.5 billion from its consumers in 12 months.

K-Electric will pay the collected amount to the Central Power Purchase Agency (CPPA-G).

According to the relevant Power Division official, the QTAs were pending due to various proceedings under adjudication/ decision at various forums. And due to this pendency, the impact of such adjustment was not passed on to the KE consumers. The Power Division in its summary had also recommended to the ECC the approval of the remaining amount of Rs250.7 billion as a tariff differential subsidy.

The officials highlighted saying that since FY2018-19, K-Electric had stopped paying CPPA-G against power purchase invoices citing clause 9.3(A) of the Power Purchase Agreement, signed between the KE and CPPA-G. This agreement expired in 2015. However, power continued to be supplied to the KE after the expiry of the term in 2015. KE’s outstanding payable towards CPPA-G has reached Rs448 billion as of September 2022 (including mark-up), and this is further adding around Rs16 billion on a monthly basis. K-Electric is of the view that it would pay NTDC (CPPA) payment against the relevant invoice for each billing period equal to the total value of the invoice, including Sales Tax minus the amount of Tariff Differential Subsidy.

And the amount of Tariff Differential Subsidy would be paid directly to NTDC by the Ministry of Finance on behalf of KESC on or before the 15th day following the delivery of such invoice to the KESC.

K-Electric in its letter dated March 10, 2022, stated that non-payment is due to pending subsidies receivables from the Government of Pakistan.