ISLAMABAD  -  K-Electric has sought the National Electric Power Regulatory Authority (NEPRA) nod for a refund of 27 paisas per unit to consumers, which the company had additionally charged from Karachiites during the month of October.

In a petition filed with NERPA, K-Electric showed its willingness to refund Rs461 million (27 paisas per unit) to consumers, on account of monthly fuel charge adjustments for October 2024.

Notably, decision on KE’s petition for a refund of 16 paisas per unit to the consumers, on account of monthly FCA for September, is pending with Nepra. The KE’s refund claims for September and October are far less than the state owned power distribution companies (Discos) as they will refund Rs 1.28 per unit on account of monthly FCA for September to the consumers, while decision for the refund of Rs 1.01 per unit on account of October FCA is pending with Nepra. Such a huge difference of Rs1.12 per unit and Re0.74 per unit in refund between KE and Discos is due to the expensive energy generation by KE as compared to the national grid.

In its petition, K-Electric argued that the adjustment is consistent with NEPRA’s previous decisions on provisional monthly fuel cost adjustments for the period from July 2023 to June 2024. The company highlighted that provisional FCAs were authorized based on parameters outlined in the Multi-Year Tariff (MYT) for 2017 to 2023, and adjustments may be implemented once the MYT for 2024 to 2030 is finalized.

The FCA for October 2024 has been calculated using the interim tariff established in March 2023 as the reference point.  It is noteworthy, that during public hearing K-Electric is being criticized regarding its reliance on ageing gas-guzzling expensive power plants, which contribute to rising costs borne by consumers or subsidized by the government. Stakeholders from Karachi are constantly expressing concerns that NEPRA is overlooking the utility’s inefficiencies, particularly the company’s failure to modernize its outdated, four-decade-old power plants. These facilities produce costly electricity, leading to higher tariffs for consumers and significant government subsidies aimed at maintaining uniform pricing.

NEPRA has scheduled a public hearing on December 5, 2024, to review K-Electric’s petition. The hearing will address two primary concerns: whether the requested FCA is justified and if the utility adhered to the established merit order when generating electricity from its own power plants and purchasing it from external sources.