The National Electric Power Regulatory Authority (NEPRA) has indicated an impending increase in power tariff for K-Electric (KE) consumers and other power distribution companies (Discos) on account of fuel adjustment for June 2023. The decision has raised concerns among consumers in Karachi, who are already grappling with inflation and economic challenges.
NEPRA’s proposal suggests an increase of Rs2.31/unit for KE consumers and Rs1.81/unit for other Discos customers, resulting in an additional burden of Rs4.30 billion on Karachi’s consumers. The power regulator conducted separate hearings for KE and Discos consumers, and the increased electricity prices are set to take effect in August, impacting the monthly bills of consumers in the city.
Clarifying the decision, NEPRA stated that the fuel price adjustment (FCA) increase for June will not apply to KE’s lifeline customers and electric vehicle charging stations. The detailed judgment on the FCA for June will be issued by NEPRA after a thorough scrutiny of the relevant data.
NEPRA officials attribute the increase in electricity prices to the higher fuel costs in June 2023. KE generated electricity at Rs24.90/unit from its own resources, while the cost of electricity received from the federal government was Rs11.56/unit during the same period. Initially, KE had requested an increase of Rs2.34/unit under the FCA. However, after data analysis, NEPRA announced an adjustment of Rs2.31/unit for the fuel price adjustment in June. This increase in power tariff under the FCA for June 2023 will be applicable for one month only.
While the power tariff hike is a significant concern for consumers, the issue has also shed light on the delay in approving multiple renewable energy projects. During KE’s FCA hearing for June, Rehan Javed, an industrial consumer from Karachi, raised concerns about the pending Requests for Proposals (RFPs) with NEPRA. These RFPs, if approved, could fast-track the inclusion of cheap and affordable power through renewable energy projects, leading to lower electricity prices for businesses and other commercial entities in Karachi, he said.
NEPRA Member Sindh, Rafique Ahmed Shaikh, has also expressed concerns about the slow progress in increasing the share of renewable energy in KE’s operations. He attributed this delay to the pending approval of the RFP at the regulatory authority. With the Ministry of Energy’s petition to raise the base tariff for the new fiscal year projecting record-high electricity prices in Pakistan, the integration of renewables in the country’s energy mix has become more urgent than ever. It is seen as a critical step towards achieving price stability and reducing Pakistan’s dependence on imported fossil fuels.
The power tariff hike has raised concerns among consumers in Karachi, who may face challenges in managing their budgets and expenditures amid rising energy costs. The situation calls for close monitoring and timely interventions from relevant authorities to alleviate the burden on the public. It also highlights the need for devising strategies to ensure sustainable and affordable energy supply in the future.
For Discos consumers, NEPRA has indicated an increase of Rs1.81/unit on account of fuel adjustment for June. The authority will issue a detailed decision after further scrutiny of the data. The increase is expected to be applicable to all customers of DISCOs except lifeline and electric vehicle charging stations. NEPRA’s decision seeks to balance the impact of fuel adjustment on consumers and is subject to further analysis to ensure fair implementation.
Published in The Express Tribune, July 27th, 2023.
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