K-Electric seeks Rs10 per unit hike in Karachi’s electricity tariff

K-Electric has requested the National Electric Power Regulatory Authority (NEPRA) to approve Rs10 per unit increase in the multi-year tariff for Karachi consumers.

NEPRA, chaired by its chairman, held a hearing on K-Electric’s application for a seven-year multi-year tariff on Thursday, attended by senior officials from K-Electric.

K-Electric's application seeks Rs10 per unit increase in the seven-year multi-year tariff, raising the cost of electricity for Karachi consumers to Rs44.7 per unit from the current Rs34 per unit.

Officials stated that they are requesting the cost recovery of working capital and have proposed various adjustment mechanisms, including mix adjustments.

They added that income from activities involving fibre cables running alongside transmission lines should be shared equally between K-Electric and consumers, and they suggested an annual adjustment in the tariff based on the dollar exchange rate.

Also read: Power tariff likely to increase by Rs3.41 per unit

K-Electric officials further mentioned significant improvements in the transmission and distribution system, stating that they might request a one-time adjustment for additional costs if necessary and seek exemptions if applicable.

During the hearing, consumers questioned the necessity of a seven-year multi-year tariff, pointing out that regulations typically allow for a four-year tariff. They expressed concerns that promises made over such an extended period might not be honoured.

One consumer stated, “Penalties should be imposed if commitments are not fulfilled on time. Billions have been given to K-Electric for transmission improvements, yet transmission losses have increased from 0.83% to 1.3%.”

Another consumer inquired about the justification for seeking working capital, noting that the government only provides working capital to IPPs and that K-Electric, as a private business, should manage its own working capital.

Consumers also raised concerns about the impact on Karachi residents, noting that hospitals in the city have declared emergencies with 4,000 heatstroke patients admitted to ten hospitals and 427 bodies reported by Edhi.

Imran Shahid, a consumer, criticised K-Electric for prolonged power outages, saying, “K-Electric is violating human rights and not adhering to NEPRA's rules, operating like a state within a state.”

He warned that Karachi residents are extremely angry about the power load-shedding and urged NEPRA to take immediate notice of the situation before it deteriorates further.