KE proposes Rs2.138/kWh cut in power tariffs for July-Dec 2019

KARACHI: K-Electric Limited has proposed to reduce tariff for its consumers by a cumulative of Rs2.138/kilowatt-hour (kWh) as the utility seeks fuel charges adjustments from the power regulator for the period of July to December 2019, it was learnt on Tuesday.

National Electric Power Regulatory Authority (Nepra) convened a hearing on March 4, 2020 to decide on the proposals to increase and decrease tariffs on account of fuel charges adjustment (FCA) for the first half of the current fiscal year.

Nepra determines FCA to account for the variation in fuel prices and generation mix. Any increase or decrease in fuel cost prices would be adjusted in consumer’s monthly bill in the form of FCA.

K-Electric proposed increases in fuel adjustment for July, August and September and decreases for October, November and December, a document showed.

KE proposed to increase July tariff by Rs1.13/kWh with a plan to collect Rs2.113 billion. Likewise, it wants a rise of Re0.781/kWh for August, eyeing Rs1.322 billion in collection in fuel adjustment, while for September, the revenue was estimated at Rs722 million with an increase of Re0.404.

However, K-Electric proposed to reduce tariffs for consumers in fuel adjustment by Re0.198/kWh for October with revenue loss of Rs344 million. It proposed Rs1.901/kWh tariff reduction for November with revenue loss of Rs2.412 billion and another reduction of Rs2.354/kWh was sought for December with a revenue loss of Rs2.403 billion.

K-Electric further requested quarterly and annual adjustments in tariff on account of variation in power purchase price, other than fuel, impact of transmission and dispatch losses on fuel charges variation, actual write-offs and other tariff components, as per the mechanism provided in the multiyear determination.

The company proposed quarterly adjustments with an upward revision of Rs1.377/kWh for April-June 2019 and Rs1.444/kWh for July-September 2019.

K-Electric claimed gross write-offs of Rs10.85 billion in the last fiscal year of 2018/19. The utility raised certain issues on the decisions of the authority in the matter of K-Electric’s monthly fuel charges adjustments for the period from July 2016 to June 2019 and decision in the matter of quarterly adjustments for the period from July 2016 to March 2019.

K-Electric requested the Nepra to allow it certain costs in its upcoming quarterly adjustments. The costs are related to Karachi Nuclear Power Plant, capacity cost of Sindh Nooriabad Power Company I and II, average sale rate, adjustment for negative FCA for certain categories, capacity cost of Sindh Transmission and Dispatch Company and write-offs.