K-Electric has filed a petition with the National Electric Power Regulatory Authority (Nepra) for refunding Rs0.27 per unit to consumers as part of the monthly fuel charges adjustment (FCA) for October 2024, which will amount to a total of around Rs461 million.
In this regard, Nepra has scheduled a public hearing for December 5, 2024 to review the company's request. The hearing will address two primary concerns – whether the requested FCA is justified and whether K-Electric has adhered to the economic merit order while generating electricity from its own power plants and purchasing it from external sources.
In its petition, K-Electric argued that the adjustment was consistent with Nepra's previous decisions on the provisional monthly fuel cost adjustments for the period from July 2023 to June 2024.
The company highlighted that provisional FCAs were authorised based on the parameters outlined in the Multi-Year Tariff (MYT) for 2017 to 2023 and adjustments may be made once the MYT for 2024 to 2030 was finalised.
The FCA for October 2024 has been calculated using the interim tariff established in March 2023 as the reference cost. K-Electric's submission included detailed calculations and supporting documentation for Nepra's evaluation and approval.
However, K-Electric has faced criticism during public hearings regarding its reliance on the ageing gas-guzzling power plants, which contribute to higher costs borne by consumers or subsidised by the government.
Business leaders in Karachi have expressed concern that Nepra is overlooking the private power utility's inefficiencies, particularly the company's failure to modernise its outdated, four-decade-old plants. These facilities produce costly electricity, leading to high tariffs for consumers and significant government subsidies aimed at maintaining uniform pricing.
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