NEPRA okays tariff hike of Rs5.28 for K-Electric

Consumers will bear additional burden of Rs4b due to rise in furnace oil prices

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Tuesday approved an increase of Rs5.28 per unit in the electricity tariff of K-Electric (KE) on account of fuel cost adjustment for April 2022.

In April, there was an additional burden of Rs4 billion on the electricity consumers because of the consumption of furnace oil in power plants.

KE had sought a tariff hike of Rs5.30 per unit under the fuel cost adjustment and Rs3.89 per unit under the quarterly adjustment.

Nepra conducted a public hearing on the petition submitted by KE for fuel charges adjustment for April 2022 and quarterly adjustment for January-March 2022.

During the hearing, KE authorities informed the regulator that global oil prices had jumped 22%, which was the reason for the high production cost.

“Why K-Electric failed to generate electricity from alternative sources,” asked Nepra Member Sindh Rafiq Sheikh.

Responding to that, KE officials said that they were going to generate 500 megawatts of alternative energy, adding that they were also working on a gas supply agreement with Sui Southern Gas Company (SSGC).

Nepra will issue a detailed decision on the quarterly adjustment after examining the data submitted by KE.

“The base tariff is not just for one company but for the entire country,” Nepra chairman said, adding that the regulator was well aware of the reasons for the increase in base tariff.

He questioned why load-shedding was being done at night, to which KE officials replied that there was no forced load-shedding at night, rather it was scheduled load-shedding as the demand for electricity was up to 3,500MW at night.

The major impact on the monthly fuel cost adjustment came from an increase in prices of fuel including furnace oil and re-gasified liquefied natural gas (RLNG) and the price of power purchase from the Central Power Purchasing Agency-Guarantee (CPPA-G).

Between March and April 2022, the prices of furnace oil and RLNG rose 22% while the price of power purchase from CPPA-G swelled 17%.

A KE spokesperson said that the FCA was incurred by utilities due to the global variation in the prices of fuel used to generate electricity and the change in power generation mix.

Regarding the tariff hike of Rs3.89 per unit sought by KE on account of quarterly adjustment, the spokesperson said that the impact of quarterly adjustment “is usually not passed on to consumers under the uniform tariff policy applicable across the country”.

Published in The Express Tribune, June 15^th, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.