Wednesday September 28, 2022

Nepra hikes KE tariff by massive Rs11/unit for June

FCA for the month of June will be collected in the bills of August and September

August 12, 2022
Nepra hikes KE tariff by massive Rs11/unit for June

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday allowed the K-Electric to collect nearly 25 billion rupees from power consumers, permitting the company to collect an additional Rs11.1023/unit in their electricity bills for August and September 2022. This was done as consumers had paid less than the actual power generation cost in June 2022, especially in view of imported LNG and oil prices and rupee devaluation against dollar.

The regulator issued its decision pertaining to monthly Fuel Charges Adjustments (FCA) for June 2022 for the K-Electric, permitting it to charge Rs11.1023/unit from all consumer categories, except lifeline consumers.

It may be noted that in line with the mechanism given in the KE’s Multi-Year Tariff (MYT), changes in fuel prices, generation and power purchase mix are passed along with certain annual adjustments.

 The Nepra held public hearings on July 28 on the petitions of the privatised company that had sought an additional Fuel Cost Adjustment for June 2022 of Rs11.389/unit, but the regulator allowed it Rs11.1023/unit, which will have an impact of near Rs25 billion (Rs 21.704 bn cost plus GS) on power consumers.

Keeping in view the huge burden of the June FCA of Rs11.1023/unit on consumers, the authority decided to collect it in two months, against the normal practice of collecting in one month. Now, this amount would be charged i.e. Rs3.0114/unit in the billing month of August and the remaining Rs8.0909/unit in September 2022.

Additionally, on August 10, the regulator allowed the company to collect an additional Rs0.5715 per unit on account of quarterly tariff adjustments for three months from June to August 2022 that will be charged in the next three months starting from August to October 2022.

It may be noted that Nepra under the FCA for May 2022 has also allowed the K-Electric to charge an extra Rs9.518/unit in two months, including Rs2.6322/unit in July and Rs6.886/unit in August 2022 bills from consumers. The Nepra decision also said: “In the FCA decision for the month of May 2022, an amount of Rs6.8858/kWh will be charged in the month of August 2022, which was inadvertently mentioned as Rs6.8860/kWh in the decision of the FCA of the KE for the month of May 2022. Therefore, the KE is directed to charge Rs6.8858/kWh for the FCA of May 2022 in the month of August 2022. The said adjustment shall be shown separately in the consumers’ bills based on units billed in the month of August and September 2022 by the K-Electric,” the notification mentioned.

In June 2022, the Nepra had raised the base power tariff by Rs7.9078/unit for the fiscal year 2022-23. Later in July, the regulator approved the federal government’s request to charge the end-consumers of all Discos, including the K-Electric, a uniform tariff and collect the increased base power tariff from the consumers in the Financial Year 2022-23. The federal government has also notified a Rs3.50 per unit increase (out of Rs7.9078/unit) in the national base electricity and tariff, promising to investigate complaints of overbilling on account of monthly FCAs in the current bills.

Power Minister Khurram Dastagir on Tuesday said the government was already examining how to minimise the impact of FCAs but hastened to add that the billing in August and September months would remain at the current level and start declining every month beginning November.

Quarterly tariff adjustments on account of variation in the power purchase price, capacity charges, variable operation and maintenance costs, use of system charges and the impact of transmission and distribution losses are built in the base tariff by the federal government.

The Nepra had also determined a Rs3.55/unit increase on account of quarterly tariff adjustment for Jan-March 2022. Similarly, another Rs 0.5715/unit for June-August 2022 was decided. Now, the federal government is to notify and then implement it. In June 2022, the Nepra issued its recommendation pertaining to the four quarters of 2021 (January to December), asking the federal government to notify collection of Rs1.33/unit from January to March 2021, and for April-June, it also asked the government to direct the K-Electric to reimburse consumers Rs0.94/unit. Similarly, for the July-Sept quarter, the regulator asked the Power Division to notify recovery of Rs6.47 from consumers, and in Oct-Dec 2021, the regulator recommended the government to notify repayment of Rs0.47/unit to power consumers.