KE tariff to rise by Rs3.7 per unit under FCA

Increase will put additional burden of Rs5.47b on Karachi consumers

ISLAMABAD:

The National Electric Power Regulatory Authority (Nepra) on Wednesday indicated an increase of Rs3.70 per unit in power tariff for K-Electric (KE) consumers and Rs0.34 per unit for consumers of other power distribution companies (DISCOs).

Tariff revision will be on account of fuel charges adjustment (FCA) for March 2023 and it will be reflected in the monthly consumer bills of May.

The power-sector regulator conducted separate public hearings of tariff petitions filed by KE and Central Power Purchasing Agency-Guarantee (CPPA-G).

The hearing was presided over by Nepra Chairman Tauseef H Farooqi. Nepra members including Engineer Rafiq Ahmed Sheikh, Engineer Maqsood Anwar Khan, Muthar Niaz Rana and Amna Ahmed were also present.

According to Nepra, the CPPA-G requested for an increase of Rs1.17 per unit under the fuel cost adjustment, but after a preliminary data check, the tariff hike was calculated at just Rs0.34 per unit.

It will be applicable to all consumers of DISCOs except for lifeline consumers and electric vehicle charging stations. It will put an additional burden of Rs2.9 billion on DISCOs’ consumers.

“It will not apply to KE consumers,” Nepra said, adding that the regulator would issue a detailed decision after further scrutiny of data.

During the hearing, it was informed that consumers would have to make additional payments in May bills due to increase in fuel charges.

Electricity demand in March was 23% lower than the corresponding period of last year while supply of liquefied natural gas (LNG) was higher than demand, according to officials of the National Power Control Centre (NPCC).

However, due to the inability to transmit electricity, production from coal decreased, officials said.

Nepra chairman observed that less offtake meant less power consumption and CPPA-G officials noted that electricity generation fell by 8% in March.

Additionally, Nepra was requested to allow the collection of Rs8.76 billion in arrears from customers for March.

Load-shedding and the burden being imposed on consumers also came up for discussion amongst some Nepra members.

Nepra member Rafiq Shaikh questioned why load-shedding did not come to an end when electricity demand had decreased. He underlined that the burden was being passed on to consumers due to governance issues.

Officials observed that consumers faced a burden of Rs1.73 billion due to the violation of economic merit order. Regarding KE’s March FCA, the public hearing was completed at Nepra headquarters.

In a statement, Nepra said that KE had submitted a request for an increase of Rs4.49 per unit in its tariff under FCA, but according to Nepra’s data analysis, “the increase amounts to Rs3.70 per unit”, which would be applicable for one month only.

The increase will put an additional burden of Rs5.47 billion on electricity consumers in Karachi and will be applied to all KE customers except for lifeline consumers and electric vehicle charging stations.

It was informed that KE generated electricity from its sources at a cost of Rs26.44 per unit in March. The cost of electricity received from the federal government came in at Rs9.50 per unit.

Additionally, the price of LNG supplied by Sui Southern Gas Company (SSGC) increased by 14% while the price of LNG received from Pakistan LNG Limited (PLL) went up by 20% during March, which led to an increase in electricity cost.

The price of electricity received from CPPA-G rose by 41%. On the other hand, KE officials stated that they added 1,900 megawatts to its system, and its electricity production capacity improved by 19%.

However, Nepra chairman expressed concern that in the last five to seven years, KE had not shown much improvement. Moreover, electricity production from imported fuel became very expensive.

“Reliance on alternative and cheap sources is increasing due to expensive electricity,” the Nepra chief added.

Published in The Express Tribune, May 4^th, 2023.

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