Power Division officials oppose K-Electric’s tariff review demand

Say such requests can be considered only in larger public interest

ISLAMABAD: A dispute has erupted in the Power Division over protecting commercial interests of K-Electric - a privatised entity - as the minister is pushing bureaucrats to press the regulator to reconsider its earlier decision and revise tariff upwards for Karachi consumers.

However, the bureaucrats opposed any such favour, arguing that the federal government could ask the National Electric Power Regulatory Authority (Nepra) to reconsider its decision only in the larger public interest. It was unfair to pressurise Nepra to serve the interest of a private concern, they said.



They were of the view that any increase in tariff for K-Electric consumers could add to their burden and would spark political backlash. Furthermore, the government is already giving subsidy to K-Electric consumers and the tariff hike would lead to payment of additional subsidy, which would put a strain on the national exchequer.

Despite the resistance from the bureaucrats, Power Division Minister Awais Ahmad Khan Leghari, in the absence of ministry secretary, approved the issuance of a letter to the regulator for considering K-Electric’s tariff revision request.

Last month, Nepra 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.

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 initially set the tariff at Rs12.07 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.

K-Electric was of the view that the tariff determination made 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.



It would impair business viability and limit the company’s ability to execute investment plans. This could result in more load-shedding in the city, K-Electric said.

“There is complete harmony among wings of the ministry and no controversy exists. Furthermore, the Power Division is only a channel for K-Electric to send its various requests to Nepra,” said a spokesman for the Power Division when asked for comments.

Published in The Express Tribune, November 12^th, 2017.

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