KE seeks tariff hike of over Rs3 per unit

Industrialists decry disparity between fuel cost adjustments sought by KE, DISCOs

ISLAMABAD:

K-Electric (KE) has sought an increase of over Rs3 per unit in electricity tariff on account of fuel charges adjustment for July 2024.

In that regard, the National Electric Power Regulatory Authority (Nepra) held a public hearing on Thursday for KE customers. The private power utility requested recovery of Rs3.09 per kilowatt-hour (kWh) from consumers through electricity bills.

Many business leaders underlined the need for natural gas supply to KE, which would lead to a reduction in fuel charges adjustment.

Nepra had earlier announced that the hearing would discuss issues pertaining to the justification of fuel charges adjustment and whether KE followed the economic merit order while taking power supply from its plants and purchasing electricity from external sources.

At the hearing, Rehan Jawed, who represented the Korangi Association of Trade and Industry, praised KE for securing what he said was the lowest tariff in Pakistan's history for its renewable energy projects while setting a new benchmark.

However, he pointed out that if the government had embraced a similar competitive bidding process five or 10 years ago, the current energy crisis could have been averted.

He lamented the disparity between KE's fuel charges adjustment and similar requests of state-owned power distribution companies (DISCOs), which had widened significantly owing to changes in reference pricing and rebasing. "This is creating confusion among Karachi consumers."

Jawed argued that fuel charges adjustment of Rs3 per unit, sought by KE, meant that consumer bills would skyrocket, underscoring the unsustainable financial strain on industries.

The industrialist highlighted the impact of high electricity costs on the competitiveness of Karachi industries, saying that local industries had not been able to compete with their counterparts in Punjab due to soaring production costs.

He suggested that if fuel adjustment was fixed at Re1 per unit until the KE tariff was finalised, the rest could be covered through a government subsidy, which would provide some relief to consumers.

Jawed denounced the gas allocation policy, which added to the woes by diverting the gas meant for KE to captive power plants, leaving over 35,000 industrial consumers in Karachi high and dry.

Had the promised 130 million cubic feet of gas per day been given to KE, the fuel adjustment could have been negative Rs5 per unit, he claimed.

Tanveer Barry of the Karachi Chamber of Commerce and Industry echoed similar remarks as he voiced frustration over the discrimination faced by Karachi industries.

He noted that while DISCOs were seeking a negative fuel cost adjustment, KE was demanding an increase of Rs3 per unit, which would exacerbate financial trouble for the city businesses.

"Karachi is being treated as a stepchild," Barry remarked and highlighted delayed processing of net metering applications and the burden of fixed charges on idle industrial units.

He questioned why Karachi industries were being forced to pay surcharges on KE bills, despite having no connection to the reasons attributed to them.

He emphatically called for an end to "mistreatment" of Karachi's business community. "Cries of fairness and relief echo loudly from the heart of Pakistan's largest metropolis, which requires urgent action," he said.

In response to a question about the agreement between Sui Southern Gas Company and KE, company officials explained that the matter was being deliberated by both organisations. In the meantime, KE said, it was making timely payment of current bills for gas consumed in power generation.