K-Electric seeks Rs0.54 per unit tariff cut

K-E seeks power regulator's approval to cut its tariff in order to pass the benefit of reduced costs on to consumers

KARACHI: K-Electric (KE) has sought the power regulator’s approval to cut its tariff by approximately Rs0.54 per unit to pass on to the consumers the benefit of reduced production cost and reduced price of procured electricity during Jan-Mar 2016.

The overall adjustment in KE’s tariff for the quarter stands at 53.952 paisa per kilowatt hour.



“It is requested that the required adjustment in tariff may be allowed for the Jan-Mar 2016 quarter,” KE Director Finance and Regulations M Aamir Ghaziani said in a petition to the National Electric Power Regulatory Authority (Nepra).

Subject to the regulator’s approval, the consumers are expected to receive the paltry relief at the peak summer season, June, when power outages are expected to prolong due to the seasonal surge in demand and limited supply.

CREATIVE COMMONS

A poor distribution network from the national grid (to KE and then to end-consumers) further limits the already scarce power supply.

The Karachi-based power generation, distribution and transmission firm said the proposal for the reduction was made with reference to the Nepra’s tariff determination on Dec 23, 2009 for KE on account of fuel price and power purchase cost variation. The submission is based on NTDC’s power purchase invoice for Mar 2016.

As per the applicable and approved tariff adjustment mechanism, the cost of production and purchase of power for the quarter decreased by net 16.82 paisa per kilowatt hour. This includes “the effect of Nepra-allowed 15% transmission and distribution losses,” he said.

The proposed reduction in tariff totalled 53.952 paisa per kilowatt hour after incorporation of variation in cost of operations, maintenance and capacity charges, he said.

After having admitted the petition, Nepra has convened a public hearing on May 23 in Karachi to consider KE’s proposal. It has invited all the interested and affected parties to make comments or raise objections as permissible under the law.

KE tariff

As per KE’s revised tariffs dated July 2015, they vary between Rs2 and Rs24.24 per unit, depending on the load and type of consumers including domestic, commercial and industrial.

The power company charges Rs2 per unit from those domestic consumers who use a maximum 50 units with a load of less than five kilowatts, in line with Pakistan’s commitment to support the marginalised.



The tariff surges to Rs5.76 per unit for households consuming 51-100 units.

The tariff for 101-200 units is Rs8.11 per unit. It is Rs10.20 per unit for households consuming 201-300 units, Rs16 per unit for 301-700 units and it peaks to Rs18 per unit for households using more than 700 units a month.

However, the consumers using 350 units for instance will not pay the lower tariff for the first 100 units. They will pay the tariff in the band just before their own for the first 300 units, and will pay the tariff in their own band (301-700 units) for the remaining 50.

Published in The Express Tribune, May 13^th, 2016.

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