NEPRA notifies Rs10.8 tariff cut for K-Electric

At public hearing, regulator asked whether KE followed economic merit order

KARACHI:

The National Electric Power Regulatory Authority (Nepra) has notified a tariff reduction of Rs10.80 per unit for K-Electric consumers on account of fuel cost adjustment for December 2022.

KE had filed an application seeking a tariff reduction of Rs10.26 per unit under the monthly fuel charges adjustment. The power-sector regulator held a public hearing on January 31, 2023.

Earlier, KE consumers had enjoyed a relief of Rs7.43 per unit under the fuel cost adjustment for November 2022.

The cut in tariff will be applicable for one month only. It will not be applied to the consumers using up to 300 units per month, agricultural consumers and electric vehicle charging stations.

At the hearing, Nepra raised different issues such as whether the requested fuel price variation was justified and whether KE followed merit order at its power plants as well as in power purchases from external sources.

In its request, KE submitted that the calculation was based on Central Power Purchasing Agency-Guarantee’s (CPPA-G) requested fuel cost component for the current month and was subject to changes based on final determination of ex-Wapda distribution companies’ (DISCOs) fuel cost adjustment.

Nepra noted that the power purchase agreement between National Transmission and Despatch Company (NTDC) and KE was signed on January 26, 2010 for five years for sale and purchase of 650 megawatts at basket rates.

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

However, the CCI’s decision was impugned by way of suits/ petitions filed by KE in the Sindh High Court.

No new agreement has been inked and KE has continued to draw energy from the national grid, which stands at around 1,100MW.

In its adjustment request, KE certified that it dispatched as per economic merit order from its own generation units (with the available fuel resources) and through import from external sources.

Published in The Express Tribune, February 10^th, 2023.

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