Nepra hints at Rs9.42/unit hike in tariff for K-Electric consumers

Nepra turns down company request for allowing transfer of May FCA in July’s bills

ISLAMABAD   –  National Electric Power Regulatory Authority Monday hinted at an increase of Rs 9.42 per unit in tariff for the consumers of K-Electric on account of fuel charges adjustments (FCA) for the month of May.

During public hearing on KE’s petition, NEPRA has turned down the company request for allowing the transfer of May FCA in July’s monthly bills. The hearing was presided over by Chairman NEPRA, Tauseef.H.Farooqi. K-Electric official requested NEPRA that that company is facing financial constraints therefore it should be allowed to receive the May fuel adjustment increase with the July bills. However, NEPRA chairman said that they are already receiving the FCA for April in July bills, and it will further burden the power consumers. NEPRA had sought an increase of Rs 11.33/unit in electricity tariff on account of fuel charges adjustment (FCA) for the month of May. According to NEPRA official, the total impact of the increase will be Rs 23 billion on KE’s consumers.

After the preliminary evaluation of data, NEPRA official informed that the difference due to costs is Rs 1.679/unit. Similarly the underutilization of efficient power plants added additional Rs.479m having an impact of 0.240/unit. After evaluation of data and some adjustments NEPRA has proposed that the increase will be Rs 9.419/unit.

KE’s official while briefing to the Authority said the main reason for the increase in electricity tariff is the high cost of fuel in the global market. It was informed that LNG prices rose by 50pc and furnace oil by 38pc in May as compared to the previous month. Similarly, the plant also received less gas due to default of LNG cargo, the official added. Chairman NEPRA said that despite the availability of cheap oil it was not used for power generation. It is unjustified not to run cheap fuel based power plants, the chairman added. However, KE official said that cheaper fuel was not available. Vice Chairman NEPRA Rafiq Sheikh asked why K-Electric is not getting cheap electricity from Thatta and Jhampir. How long will it continue to supply expensive electricity? he further questioned. K-Electric official responded that the company can lift up to 1400 MW of electricity from the national grid, however currently they are getting up to 1,100 MW from the national grid as there is a shortage of electricity in the rest of the country.

Representative of Karachi Chamber of Commerce and Industry, Tanveer Bari said that this huge increase has been requested by KE, which will force the industries for lock down. With such expensive electricity, industries will come to a standstill, he added. He said that K-Electric has not upgraded itself. K-Electric officials said that they will generate up to 800 MW of electricity from solar in the next four years. Similarly it is planned that the company will generate 600 MW of electricity from local coal. NEPRA has reserved the judgment and will announce it after further evaluation of data.

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