K-Electric to extract Rs26bn more from Karachiites

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ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday allowed K-Electric to raise about Rs26 billion through Rs5.28 per unit additional fuel cost adjustment (FCA) from its consumers in July and about Rs3.90 per unit additional cost recovery under quarterly tariff adjustment (QTA).

Separately, the management of KE assured the Karachi-based parliamentarians to address the loadshedding crisis to the extent possible, remove billing complaints and provide enough time for consumers to pay their bills without late payment surcharge.

At a public hearing presided over by Nepra Chairman Tauseef H. Farooqui, the regulator considered KE’s request for Rs5.30 per unit additional FCA for electricity sold in April but after minor adjustments, allowed Rs5.28 per unit hike. This will enable the Karachi-based private power entity to recover about Rs10.2bn in additional funds from consumers in the billing month of July.

Likewise, the regulator also took up another KE’s request for Rs4.53 per unit additional charge from consumers for January to March 2022 quarter under quarterly tariff adjustment on account of an increase in the weighted average cost of power purchases for the January–March quarter with additional revenue impact of about Rs17.5bn.

The regulator, however, allowed an increase of Rs3.90 per unit in base tariff with an additional revenue impact of about Rs16bn. The QTA increase was, however, unlikely to affect the consumers as it would form part of the tariff differential subsidy (TDS) to be paid by the government out of budget because of the national uniform tariff policy, a Nepra official explained.

The KE said the increase in FCA was on account of the higher tariff of the national grid and furnace oil cost for its power generation.

The KE claimed that the major impact on the monthly FCA for April 2022 was due to an increase in the fuel price increase of furnace oil and the national grid. The price of Furnace Oil in April 2022 has increased by 22pc from March 2022. The price of electricity from the national grid in April 2022 increased by 14pc, it said adding the price of power from the national grid in April 2022 stood at Rs10.66 per unit as compared to Rs9.387 per unit in March 2022.

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.

Meanwhile, Power Minister Khurram Dastgir Khan directed the KE to ensure power supply during water supply hours to maintain water provision in all areas. He was presiding over a meeting with Karachi-based members of the national assembly on electricity problems in the country’s largest metropolitan.

Most of the issues pertained to water and electricity problems being faced by the people of Karachi including unscheduled load shedding, over billing and disruption in water supply due to power outages.

On the desire of Health Minister Qadir Patel, the meeting decided to constitute a committee to develop a liaison between elected representatives and K-electric including late distribution of bills close to the due date, resulting in a late payment surcharge to consumers.

KE’s Chief Executive Moonis Alvi assured the meeting to rationalize load management and complaints of overbilling would be resolved and any discrepancy in billing procedure will be addressed urgently. He also assured to ensure timely distribution of bills.

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