Karachi to pay extra Rs7.22b in Dec power bills

NEPRA allows K-Electric to collect Rs3.75 per unit on account of FCA for Sept

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) has allowed the K-Electric to collect Rs3.75 per unit on account of fuel charge adjustments (FCA) for the month of September from the consumers of Karachi.

The power consumers of the Karachi will pay an additional Rs7.22 billion in their electricity bills this December after the move.

In its petition submitted to Nepra on the basis of provisional data, K-Electric had sought an increase of Rs3.45 per unit in its power tariff under fuel charges adjustments for the month of September this year.

The K-Electric had requested the regulator -- under the multi-year tariff 2017-23 -- to allow the company to pass on the burden of Rs6.639 billon to the consumers in its service area under the FCA for September. However, later the demand for an increase by KE was revised upward on the basis of actual data.

On November 3, Nepra had conducted a public hearing on the K-Electric petition.

During the hearing, the K-Electric had submitted that at the time of submission of its FCA request, the authority's approved fuel rate of XWDISCOs for the month of September was unavailable.

Therefore, the K-Electric had used the last available rate in its workings.

The power company, accordingly, requested that the amount claimed on the account of energy purchased from the CPPA-G was subject to adjustment based on the FCA decision of the authority in the matter of XWDISCOs for September.

The K-Electric also submitted that major reason for the high FCA for September was because of the increase in the prices of RLNG, RFO and coal against the month of June.

After hearing and going through the K-Electric’s data, Nepra allowed an increase of Rs 3.7571 per unit in the power tariff – an impact of Rs7.22 billion on the consumers.

According the Nepra notification, the increase would be applicable to all categories, except lifeline consumers.

“The K-Electric shall reflect the fuel charges adjustment in respect of September 2021, in the billing month of December 2021,” read the notification.

The authority observed that both Korangi Gas Turbine Power Station (KGTPS) and Site Gas Turbine Power Station (SGTPS) were not operated by K-Electric to their full capacities, and also less energy was withdrawn from efficient sources.

Similarly, Korangi Combined Cycle Power Plant was also operated on diesel.

The authority also inquired from K-Electric regarding directions issued vide letter dated September 16 this year for making necessary arrangements for provision of gas at the required pressure at SGTPS and KGTPS within 30 days and ensure that the plants were optimally utilised in future.

In written comments, the Karachi Chamber of Commerce and Industry (KCCI) said the K-Electric's own generation was expensive against the power purchased from external sources.

“The K-Electric generates energy from old and inefficient plants, which need to be shut down. Power generation mix needs to be improved to reduce the tariffs, by shifting away from dollar pegged generation in favour of solar, wind and hydel generation,” its statement read.

“For instance, the addition of K-Electric's 900 MW RLNG based BQPS-III as well as renewable energy is estimated to reduce the cost of electricity. Consumers should not bear the burden of inefficiencies of DISCOs, imprudent energy policies, deplorable composition of energy mix and electricity thefts. The FCA should not be increased or if absolutely required, should be within Rs.1.0/kWh and in future K-Electric should be barred from passing cost impact of inefficient power plants.”