K-Electric willing to refund Rs247m to its clients

NEPRA has scheduled a public hearing on Thursday, October 31, 2024, to review K-Electric’s petition

By Israr Khan
October 25, 2024
A view of the K-Electric head office in Karachi. — K-Electric website/File
A view of the K-Electric head office in Karachi. — K-Electric website/File

ISLAMABAD: K-Electric, the Karachi-based power utility, has filed a petition with the National Electric Power Regulatory Authority (NEPRA) willing to refund Rs0.16 per unit to consumers as part of monthly fuel charge adjustments (FCA) for September 2024, totaling approximately Rs247 million.

NEPRA has scheduled a public hearing on Thursday, October 31, 2024, to review K-Electric’s petition. The hearing will address two primary concerns: whether the requested FCA is justified and if the utility adhered to the established merit order when generating electricity from its own power plants and purchasing it from external sources.

In its petition, K-Electric argued that the adjustment is consistent with NEPRA’s previous decisions on provisional monthly fuel cost adjustments for the period from July 2023 to June 2024. The company highlighted that provisional FCAs were authorized based on parameters outlined in the Multi-Year Tariff (MYT) for 2017-2023, and adjustments may be implemented once the MYT for 2024-2030 is finalized.

The FCA for September 2024 has been calculated using the interim tariff established in March 2023 as the reference point. K-Electric’s submission included detailed calculations and supporting documentation for NEPRA’s evaluation and approval.

However, K-Electric has faced ongoing criticism during public hearings regarding its reliance on ageing gas-guzzling power plants, which contribute to rising costs borne by consumers or subsidized by the government. Business leaders in Karachi have expressed concerns that NEPRA is overlooking the utility’s inefficiencies, particularly the company’s failure to modernize its outdated, four-decade-old plants. These facilities produce costly electricity, leading to higher tariffs for consumers and significant government subsidies aimed at maintaining uniform pricing.

Moreover, stakeholders have pointed out that no assessments have been made regarding the heat rate of K-Electric’s plants, which are generating expensive power.