On K-Electric’s request, Power Division seeks tariff revision

Asks NEPRA in a letter to reconsider the tariff for smooth operations of the company

ISLAMABAD: K-Electric is still concerned about a lower-than-expected tariff increase announced by the National Electric Power Regulatory Authority (Nepra), the Power Division has asked the regulator to reconsider the tariff revision in national interest.

Last month, the regulator increased K-Electric’s base tariff by Rs0.70 per unit under a multi-year tariff programme compared to a revision of around Rs3 demanded by the private power utility.

Talking to The Express Tribune, a senior government official said K-Electric may challenge Nepra’s decision if the regulator did not reconsider the request for revision in the tariff determination. “K-Electric is considering taking legal course of action,” he said.

In the first stage, he said, K-Electric had approached the Power Division which, in turn, wrote a letter to Nepra last week, asking it to reconsider the tariff determination for the power utility.

“If Nepra does not address the company’s concerns, the matter may be taken to court for remedy,” the official added.



K-Electric expressed its reservations after Nepra revised the base tariff upwards to Rs12.77 per unit from Rs12.07 effective July 2016, which would remain in place till 2023.

K-Electric had sought an increase to Rs15.57 per unit for sustainability of its operation, but Nepra turned down the request and set the tariff at Rs12.07 per unit in its decision in March 2017.

Thereafter, K-Electric filed a review petition and after conducting hearings, the regulator increased the tariff to Rs12.7706 per unit.

Under the uniform tariff policy, the end-consumer tariff will be kept at Rs12 per unit for Karachi consumers. K-Electric will either have to absorb the increase which will hit its profits or the government will have to give a subsidy.

K-Electric was of the view that the tariff determination made by Nepra in response to the company’s multi-year tariff review motion filed in April 2017 would have far-reaching implications for the people and electricity supply in Karachi as it would impair business viability and limit its ability to execute investment plans. This could result in more load-shedding in the city, it said.



In its letter, the Power Division told the regulator that it should reconsider the tariff determination for smooth operations of the power utility in Karachi.

“The Power Division deals with all power utilities, therefore, it has taken into account concerns of K-Electric and has conveyed its request to the regulator for reconsideration of the tariff determination,” a senior official of the Power Division said.

Published in The Express Tribune, November 8^th, 2017.

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