Nepra reserves decision on KE tariff hike petitions

ISLAMABAD – National Electric Power Regulatory Authority (NEPRA) has reserved its judgment on the K-Electric’s petitions for the increase in power tariff by Rs5.499 per unit on account of monthly and quarterly adjustments. 

In a public hearing on KE petitions, on account of monthly fuel charges adjustments and quarterly adjustment, Chairman NEPRA Tauseef.H.Farooqi has hinted at liberalisation of the country’s power supply market allowing big businesses to purchase power from any distributor they want.

KE had sought an increase of 5.499 per unit on account of monthly fuel charges adjustments and quarterly adjustment for the first quarter of fiscal 2021-22. In two separate petitions submitted to National Electric Power Regulatory Authority (NEPRA), K-Electric had sought an increase of Re 0.317 per unit on the account of monthly fuel charges adjustments for November 2021. 

The impact of the monthly FCA will be Rs446 million on the consumers. Another big raise of Rs5.182 for unit demanded by the company is on account of quarterly adjustment for the first quarter of fiscal 2021-22 (July to September 2021). 

Representative of Karachi Chamber of Commerce said that electricity is becoming very expensive for businessmen. “What we should do? Should we shut down the industry or hold a sit-in in front of Nepra head office?” representative of Karachi Chamber questioned.

Nepra chief hints at liberalisation of power supply market, allowing big businesses to purchase power from any distributor they want

Chairman NEPRA said, “We are introducing a new system for high power consuming businesses.”. NEPRA is opening power purchase, where big business will buy electricity directly from whomever they want. While inviting Karachi Chamber, chairman NEPRA said that Karachi Chamber is very important; you should come to NEPRA and discuss all the issues with us. Chairman NEPRA observed that the November fuel price adjustment will be reduced by more than 75 paisas per unit. The official of KE informed that they have signed preliminary drafts of an agreement to take 2050 MW of electricity from the national grid.” We have also reached a preliminary agreement with NTDC in this regard and in the coming days, the agreement will be finalised” the official added.

It was further informed that KE will start power supply from its new 900-megawatt plant this month. The first unit of the power plant will be operational during the ongoing month, while the second unit will start production in June, the official added. Nepra has reserved the judgment and will announce it later. In a petition submitted to National Electric Power Regulatory Authority (NEPRA), under Multi Year Tariff 2017-23, KE had requested the regulator to allow the company to increase the power tariff by Re 0.317 per unit for the power consumers in its service area on account of monthly FCA for November 2021. However, later the demand for increase by KE had been withdrawn and the company had requested a decrease on the basis of actual data.

Under the tariff mechanism, changes in fuel cost are passed on to consumers only on monthly basis through an automatic mechanism, while quarterly tariff adjustments on account of variation in the power purchase price, capacity charges, variable operation and maintenance costs, use of system charges and including the impact of transmission and distribution losses are built in the base tariff by the federal government. It is worth mentioning here that for the monthly FCA of October, KE had requested for the increase of Rs 1.38 per unit. NEPRA had conducted hearing on the petition early this month and had reserved the judgment.   Similarly for September FCA, NEPRA had raised electricity tariff by Rs3.75 per unit for consumers of K-Electric (KE) under Fuel Charges Adjustment (FCA) for the month of September 2021.

 

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