Karachi citizens to pay inflated power bills from June to Sept

ISLAMABAD: The residents of Karachi will face inflated electricity bills over the next four months starting in June 2024, as the National Electric Power Regulatory Authority (Nepra) on Friday approved a nine-month combined net fuel charges adjustment (FCAs) of Rs10 per unit.

The decision is provisional and subject to adjustment, including any related working capital impacts, based on Nepra’s final determination as the authority deliberates on K-Electric’s multi-year tariff for 2024-30.

The FCAs cover the period from July 2023 to March 2024. According to Nepra decision, the regulator has determined Rs1.711 per unit increase for July 2023, Rs0.6608 per unit for August, Rs1.3946 per unit for September, Rs4.4941 per unit for October, Rs1.7704 per unit for November, Rs0.793 per unit for December, and Rs2.9696 per unit for January 2024. For February and March 2024, the FCAs were set at negative Rs1.818 per unit and negative Rs1.9716 per unit, respectively, meaning that the utility will reimburse these charges to its clients. Nepra decided to stagger the recovery of these FCAs over four months to avoid overburdening consumers. These charges will be collected from June to September 2024.

In June 2024 bills, K-Electric consumers will pay an additional Rs2.6761 per unit, covering the FCAs for October 2023 (Rs4.4941 per unit) and February 2024 (negative Rs1.818 per unit). In July 2024, an additional Rs3.1057 per unit will be recovered for July 2023 (Rs1.711 per unit) and September 2023 (Rs1.3946 per unit). In August 2024, Karachi residents will pay an additional Rs3.224 per unit to K-Electric for the FCAs of August 2023 (Rs0.6608 per unit), November 2023 (Rs1.7704 per unit), and December 2023 (Rs0.793 per unit).

Similarly, in September 2024, an additional Rs0.998 per unit will be recouped from power consumers for January 2024 (Rs2.9696 per unit) and March 2024 (negative Rs1.9716 per unit).

K-Electric, in a statement, said that the mechanism governing the calculations for FCA is outlined in the Multi-Year Tariff (MYT) for distribution companies. Since K-Electric’s MYT petition for the control period FY24 to FY30 is currently under deliberation, KE requested Nepra for directions on passing on the FCA costs for the period from July 2023 to March 2024 to customers in their bills.

On May 9, the regulator held a public hearing on the petition and included detailed discussions on the variations in fuel costs incurred by KE during the specified period. “These adjustments account for global changes in fuel prices and KE’s energy mix.”

During the first nine months of FY24, customers of other distribution companies (DISCOs) in the country have already undergone a similar process of paying FCA on a monthly basis, with an average rate of approximately Rs2.89 per unit. In comparison, KE’s provisional FCA during the same period is approximately Rs1.26 per unit on average.

NEPRA has directed K-Electric that positive monthly FCAs will apply to all consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers. Negative FCAs will apply to all categories except lifeline consumers, domestic consumers using up to 300 units, EVCS, and agriculture consumers.