K-Electric tariff further upped by Rs1.55 per unit

The National Electric Power Regulatory Authority (Nepra) has given the nod to increasing the cost of electricity for Karachi by an additional Rs1.55 per unit.
The regulatory authority sanctioned the hike in the K-Electric’s tariff under the second quarter adjustment of the previous financial year.

Nepra has sent the decision to the federal government for the issuance of a notification.

The additional collections will be made in the bills from May to July 2023.
The federal government had approached Nepra to maintain a uniform tariff in the country.

The regulatory body issued the decision after holding a hearing on the request of the federal government.

Earlier this month, Nepra had notified a Rs3.93 per unit increase in the power tariff for K-Electric consumers on account of fuel cost adjustment (FCA) for the month of March 2023.

The Nepra decision would reflect in the power bill of May 2023.
K-Electric had sought an increase of Rs4.49 per unit.

The regulator noted that a power purchase agreement was signed between the National Transmission and Despatch Company (NTDC) and K-Electric on January 26, 2010 for five years for the sale or buying of 650MW on basket rates.

Subsequently, a decision was made by the Council of Common Interests (CCI) in its meeting on November 8, 2012 in connection with the modalities for the withdrawal of electricity from the NTDCL by the petitioner, wherein it was decided to reduce the supply of energy by 300MW from the company to K-Electric.

However, the decision of the CCI had been impugned by the way of suits and petitions by K-Electric in the Sindh High Court in Karachi.
No new agreement had been signed between K-Electric and the NTDCL till date.
K-Electric was continuing to draw energy from the national grid -- which at present was around 1,100MW.

The city’s power utility, in its adjustment requests, had certified that it despatched as per economic merit order from its own generation units -- with the available fuel resources -- and import from external sources.

It also certified that the cost of fuel and power purchase claims did not include any amount of late payment surcharge, mark-up or interest.
Tanveer Barry, a commentator, raised concerns about the high FCAs during the summer of 2023.

K-Electric responded that with the inclusion of Bin Qasim Power Station 3 (BQPS-III), the overall generation cost would reduce.

Imran Shahid, another commentator, submitted that K-Electric should not be operating inefficient plants, which had outlived their lives and were resulting in higher generation cost.

K-Electric, while responding to the comments, maintained that it had improved its overall generation fleet efficiency to 48% over the last 15 years.

It claimed that BQPS-I unit 1 and unit 2 would be decommissioned after three months and units 5 and 6 would only be operated if they fell in the economic merit order to meet the load requirement.