K-Electric seeks Rs14.53 tariff increase

K-Electric has requested the National Electric Power Regulatory Authority (Nepra) to increase power tariff by Rs14.533 per unit (kilowatt-hour - kWh) on account of quarterly tariff adjustment.

In its petition, K-Electric (KE) demanded negative fuel charges adjustment (FCA) at the rate of Rs3.47 per kWh for the month of July 2022.

Nepra has announced that it will conduct a public hearing on August 31 of the petition submitted by K-Electric on account of FCA for July 2022 and quarterly adjustment for April-June 2022.

According to a spokesperson for the power utility, the impact of quarterly adjustment is usually not passed on to consumers under the uniform tariff policy applicable across the country. However, the final decision rests with the federal Ministry of Energy, the government of Pakistan and Nepra.

July’s FCA is lower as compared to the previous month primarily due to a decrease in fuel prices.

The price of power purchased from the Central Power Purchasing Agency-Guarantee (CPPA-G) in July 2022 decreased 31% as compared with June 2022.

Similarly, for RLNG, the price in July 2022 decreased 16% from June 2022. For furnace oil, the price in July 2022 increased 4% from June 2022.

“Fuel cost adjustment is reviewed every month and is applicable to consumer bills for only one particular month as per applicable tariff across the country,” said the K-Electric spokesperson.

FCA is incurred by utilities due to global variation in prices of fuel used to generate electricity and change in the generation mix.

Furthermore, consumers also get the benefit when fuel prices decline as compared to the reference month.

FCA is applied after Nepra’s scrutiny and public hearing, which is conducted independently for KE and state-owned entities (DISCOs).

Alongside final approval of the cost to be charged to consumers, Nepra also specifies the period during which these costs can be applied to consumer bills. The charges may be split over multiple months as per authority’s directions to facilitate consumers.

Published in The Express Tribune, August 24^th, 2022.

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