KE seeks Rs4.21/unit cut on account of FCA

If approved, KE consumers likely to enjoy relief of Rs7.21b

ISLAMABAD:

K-Electric (KE) consumers are likely to get some relief as the company seeks reduction of Rs4.211/unit in tariffs on account of Fuel Charges Adjustment (FCA) for the month of August.

In a petition submitted to the National Electric Power Regulatory Authority (Nepra), KE sought allowance to reduce the power tariff by Rs4.211/unit on account of a monthly FCA for August. Nepra announced that it will hold a public hearing on September 29 of the tariff petition filed by KE. The negative FCA at the rate of Rs4.211/unit requested by KE will provide relief of Rs7.217bn to KE consumers.

Issues framed by the regulator for discussion in the hearing include, whether the requested fuel price variation is justified, and whether KE has followed the merit in order while giving dispatch to its plants as well as power purchases from external sources.

KE’s August FCA is lower compared to the previous month primarily due to a decrease in fuel prices. The price of power purchased from CPPA-G in August 2022 had decreased by 33% as compared with June 2022.

Similarly, for RLNG, the price in August 2022 decreased by 16% from June 2022. In addition to this, KE had used expensive furnace oil for power generation, which had witnessed an increase of 3% during the month of August as compared to June 2022.

According to the KE spokesperson, “Fuel adjustment is reviewed every month and is applicable on consumer bills for only one particular month per applicable tariff across the country. The FCA is incurred by utilities due to global variation in the prices of fuel, used to generate electricity and change in the generation mix.”

Furthermore, consumers also get some benefit when fuel prices decline as compared to reference months.

Published in The Express Tribune, September 21^st, 2022.

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