K-Electric tariff cut by Rs2.6 per unit

Consumers will receive relief of Rs3b in March electricity bills

ISLAMABAD:

The power sector regulator on Thursday slashed the tariff of K-Electric by Rs2.60 per unit on account of fuel cost adjustment for December 2021.

The National Electric Power Regulatory Authority (Nepra) announced the tariff reduction following a public hearing on February 2, 2022. Earlier, it had reserved its decision.

The tariff cut will provide a relief of Rs3,038 million to K-Electric consumers, which will reflect in the electricity bills of March 2022.

The fuel cost adjustment will be applicable to all consumer categories except for lifeline consumers, domestic consumers consuming up to 300 units and agricultural consumers.

Read: NEPRA likely to slash KE power tariff by Rs2.59

Nepra pointed out that the tariff decision would also be applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption levels.

In case the incremental consumption industrial and winter incentive package was applicable to K-Electric, the negative fuel cost adjustment allowed to such consumers would be adjusted in subsequent adjustments.

During the public hearing, two issues were raised, which included whether the requested fuel price variation was justified and whether K-Electric followed the economic merit order while supplying electricity from its own power plants as well as in power purchases from external sources.

Nepra noted that a power purchase agreement had been signed between National Transmission and Despatch Company (NTDC) and K-Electric on January 26, 2010 for five years for the sale/ purchase of 650 megawatts at basket prices.

Subsequently, the Council of Common Interests (CCI), in its meeting held on November 8, 2012 with respect to modalities for the withdrawal of electric power from NTDC by the petitioner, decided to reduce the energy supply by 300MW.

However, the CCI decision was impugned by way of suits/ petitions filed by K-Electric in the Sindh High Court.

No new agreement has been signed so far and K-Electric is continuing to draw energy from the national grid, which at present stands at around 1,100MW.

When asked about the signing of a gas sale agreement with Sui Southern Gas Company (SSGC), K-Electric told Nepra that a meeting on the subject was held with the Ministry of Energy (Petroleum Division) in the presence of SSGC representatives, followed by another meeting with the gas utility.

K-Electric said that it called for setting aside the legacy issues and moving forward, however, SSGC wanted to resolve all issues including the old matters.

It added that the power company was also exploring alternative sources such as evaluating the relocation of power plants to a location where re-gasified liquefied natural gas (RLNG) could be made available.

Regarding the terms of gas sale agreement, K-Electric submitted that SSGC was not committing any specific quantity, rather it would be on “as and when available basis” and unless SSGC made required investment in its network, there would be no improvement in gas pressure.

Nepra directed K-Electric to share with it the written submissions of SSGC about the gas sale agreement.

Published in The Express Tribune, February 18^th, 2022.

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