ISLAMABAD   -  Karachiites have lamented the inefficiency and costly energy generation of K-Electric, saying the company should stop generation from its own expensive power plants, and instead get electricity from the national grid which is far cheaper as compared to its own generation.

The consumers were of the view that while power tariff has gone down for the consumers in July, it has gone up by over Rs3.09 per unit for them. The consumers have also challenged the K-Electric claim of getting the lowest bid for its solar plant and requested National Electric Power Regulatory Authority that to investigate the claim.

The consumers have expressed these view in a public hearing organised by National Electric Power Regulatory Authority on the KE’s petition for a hike in power tariff by Rs3.09/unit on account of monthly fuel charges adjustments for the month of July. The intervenors were of the view that the K-Electric generation is much costlier and inefficient, and the common consumer is suffering, while NEPRA has turned a blind eye towards it. Interestingly, the power tariff is going down for the consumers of XWDISCOs by around Re0.31/unit, on account of July FCA, while K-Electric tariff is going up by Rs3.09/unit.

Due to inefficient plants of the K-Electric, the common consumers are suffering, they said. It was further argued that on the net-metering license, K-Electric takes up to three months while in other Discos it is only three to four weeks. Industries are paying huge utility bills due to fixed charges, they opined. Another commentator said that whether anybody (Nepra) has checked the transmission system of K-Electric, its own generation capacity. Aneel from Karachi said, “Nobody has checked the heat-rate of the K-Electric plants that are generating expensive power. And at the end the Karachi consumers pay these inefficacies in their bills.” The company is also not disclosing the contractual value of furnace oil consumption in plants. He also questioned that where the slag, a bi-product of the plants go? Why its prices are not being priced in tariff to benefit the consumers. Who sells it? There should be thorough investigation. NEPRA has completely ignored these questions/concerns of the consumers and did not reply.

Imran Shahid of Jamat-e-Islami also criticized the expensive generation of K-Electric. He said the bad governance of Power Division, NEPRA and K-Electric are affecting the consumers. The 886km Matiari to Lahore HVDC transmission line is faulty and is unable to transmit the required capacity. There is over 5000MW in south region and if the government is unable to transmit to the north then it should be diverted to Karachi. We should get rid of K-Electric. Don’t punish the Karachi consumers because of K-Electric incapability. The participants also asked Authority that since the solar price are continuously going down then why the K-Electric claims that it has win the lowest Rs11.2/unit tariff. “Is it not still high, the authority should also investigate it.” Rehan Jawed, representing the Korangi Association of Trade and Industries (KATI), lamented the disparity between KE’s fuel charge adjustments (FCA) and that of other DISCOs, which have recently diverged significantly due to changes in reference pricing and rebasing. This, he said, is creating confusion for Karachi’s customers. Rehan said that an FCA set at Rs 3.09 means a bill that should have been Rs 300,000 skyrockets to Rs 900,000, underscoring the unsustainable financial strain on industries. The industrialist further highlighted the impact of high electricity costs on Karachi’s competitiveness, stating that local industries are unable to compete with their counterparts in Punjab due to soaring production costs.

He suggested that if FCA was fixed at Re1/unit until KE’s tariff is finalized, the rest could be covered by a government subsidy, advocating for immediate relief. Adding to the woes, Rehan criticized the gas allocation policy, which, according to him, has diverted gas meant for KE to captive power plants, leaving over 35,000 industrial consumers in Karachi to bear the brunt. He speculated that had the promised gas of 130 mmcfd been given, the FCA could have been negative Rs5/unit, stressing the missed opportunity for cost savings. Tanveer Barry from Karachi Chamber of Commerce and Industries (KCCI) echoed these sentiments, expressing frustration over the inequities faced by Karachi’s industries. He noted that while DISCOs’ FCA was in the negative, Karachi’s FCA stood at PKR 3, exacerbating the financial strain on the city’s businesses. “Karachi is being treated as a stepchild,” Barry remarked, highlighting the delayed processing of net metering applications and the burdensome fixed charges imposed on idle industries. He questioned why Karachi industries are being forced to pay surcharges on their KE bills, despite having no connection to the reasons behind them. Barry’s frustration was evident as he called for an end to what he perceives as the mistreatment of Karachi’s business community. Waseem Mukhtar, Chairman NEPRA, said that the K-Electric’s positive FCA is based on the old tariff while the DISCOs FCA is negative and is based on new based tariff. He however said that the K-Electric tariff is being finalized. The chairman also said that since the power producers are in Power Purchase Agreement (PPA) with Central Power Purchasing Agency (CPPA), so terminating the agreement without of the producer’s consent is not possible. This is the main impediment in diverting power to K-Electric.