K-Electric seeks Rs11.38 per unit tariff hike

Public hearing on company’s petition will be held on July 28

ISLAMABAD:

Electricity consumers of Karachi are likely to face another increase in power tariff by Rs11.38 per unit on account of fuel cost adjustment for June 2022.

To consider the tariff hike, the National Electric Power Regulatory Authority (Nepra) will conduct public hearing on July 28 on K-Electric’s petition for fuel charges adjustment for the month of June.

The private power utility has sought a tariff increase of Rs11.38 per kilowatt-hour (kWh) in its petition. As per applicable tariff rules across the country, the fuel cost adjustment is reviewed every month and is applicable to consumer bills for only one month.

Major impact on the fuel cost adjustment for June 2022 came from the increase in prices of furnace oil and power purchased from the Central Power Purchasing Agency-Guarantee (CPPA-G).

The price of re-gasified liquefied natural gas (RLNG), which is also used as a fuel in power production besides furnace oil, increased 50% in June 2022 compared to the March level.

The RLNG price stood at Rs4,627 per million British thermal units (mmbtu) as compared to the price of Rs3,083 per unit in March 2022.

The price of electricity purchased from CPPA-G increased 74% in June 2022 from March. The price was Rs15.844 per kWh in June as compared to Rs9.098 per unit in March 2022.

The fuel cost adjustment is sought by power utilities due to the global variation in the prices of fuel used to generate electricity and the change in energy generation mix.

These costs are passed on to consumers following Nepra’s scrutiny and approval. Consumers also receive some benefit when the cost of fuel decreases in the market.

After the public hearing and scrutiny, the regulator will make a decision on the request and issue instructions about the period during which these costs can be applied to consumer bills.

Published in The Express Tribune, July 22^nd, 2022.

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