K-Electric seeks Nepra nod for FCA refund

ISLAMABAD: K-Electric has filed a petition with the National Electric Power Regulatory Authority (NEPRA) to refund power consumers under the Fuel Cost Adjustments (FCAs) due to higher charges than the actual cost of generation.

The Karachi-based utility submitted its petition to NEPRA, outlining three distinct scenarios and seeking authorisation for one of them. NEPRA has scheduled a public hearing on June 12, 2024, to deliberate on the matter.

In the first scenario, K-Electric proposes a Rs 1.18 per kilowatt-hour relief to its consumers for April 2024 based on (FCA-Reference tariff-march 2023). The second requests a Rs 0.44 per unit increase (additional collection) based on the FCA-Reference Monthly Cost. The third one suggests a Rs 0.74 per unit relief based on the FCA-Reference Yearly Average Cost.

The FCA mechanism is designed to adjust the difference between the actual fuel cost and the reference fuel cost. The FCA-Reference Interim Tariff addresses the difference between actual and reference fuel costs as per the interim tariff. The FCA-Reference Monthly Cost examines the variance between actual and reference fuel costs according to the tariff petition, while the FCA-Reference Yearly Average Cost calculates the difference based on annual weighted average fuel costs from tariff petitions.

Nepra has outlined specific issues to be addressed during the hearing. They include determining whether the requested FCA relief by K-Electric is justified and if the power utility has adhered to the merit order in dispatching its power plants and purchasing power from external sources. The regulatory authority has invited all interested and affected parties to submit their written or oral comments or objections for consideration during the hearing. This engagement is in line with statutory provisions allowing public participation in such regulatory decisions.