K-Electric, DISCOs seek power tariff increase

If approved, KE consumers will bear additional burden of Rs2.78b

ISLAMABAD:

Power distribution companies (DISCOs) have requested a tariff hike of Rs2.05 per unit while K-Electric (KE) has sought an increase of Rs1.49 per unit on account of fuel charges adjustment (FCA) for May 2023.

The National Electric Power Regulatory Authority (Nepra) will hold separate hearings of the two petitions on July 5, 2023. The Central Power Purchasing Agency-Guarantee (CPPA-G), on behalf of DISCOs, has asked Nepra to approve an increase of Rs2.05 per kilowatt-hour (kWh) in power tariff.

According to the CPPA-G’s application, 12,283.68 gigawatt-hours (GWh) of energy costing Rs9.7205 per kWh was generated in May. Of this, 11,954.36 GWh was delivered to DISCOs at a cost of Rs9.8817 per kWh.

It has provided detailed information on the production of energy from various sources in May, including hydel, coal, residual fuel oil, gas, re-gasified liquefied natural gas (RLNG), nuclear, import from Iran, mixed sources, wind, bagasse and solar.

In its application, KE has requested for a positive FCA of Rs1.49 per kWh for May 2023. If tariff is increased, the electricity consumers of Karachi will bear an additional burden of Rs2.78 billion, said Nepra in its notice of hearing.

KE, in a statement, said the request for FCA was made due to slight increases in prices of fuel and power purchased from CPPA-G.

Compared to the reference month of March 2023, the price of furnace oil rose by 3% in May 2023 while the price of power purchased from CPPA-G went up by 4%, it said. “The price of RLNG purchased from PLL (Pakistan LNG Limited) decreased by 4% whereas the price of RLNG supplied by SSGC (Sui Southern Gas Company) increased by 3%.”

FCAs are necessary due to global variations in prices of fuel used for electricity generation and changes in the power generation mix. These costs are passed on to consumers for one month, subject to Nepra’s scrutiny and approval.

It is worth noting that the consumers also receive benefit when fuel costs decrease.

In its public hearing notices, Nepra has invited all interested and affected parties to come and raise any written or oral objections they may have during the hearings. Consumers across the country should brace for the potential additional burden as Nepra is likely to grant approval for the proposed adjustments in power tariffs of both DISCOs and KE.

Published in The Express Tribune, June 21^st, 2023.

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