NEPRA reserves decision on Rs1.26/unit hike in power price for KE consumers

Karachitis may have to bear an additional burden of Rs1.26 per unit hike in power price on account of fuel charges adjustment (FCA) for the month of July 2021 and quarterly adjustment for the quarter ending June 2021 under Multi Year Tariff (MYT) 2017-23.

National Electric Power Regulatory Authority (NEPRA) on Thursday completed its necessary hearing process regarding monthly Fuel Charges Adjustment (FCA) for July 2021 and quarterly adjustment for the quarter ending June 2021 under Multi-Year Tariff (MYT) 2017-2023which was sought by K-Electric. And, NEPRA has completed its hearing process in these regards and reserved its decision in these regards which will be announced very soon.

Under a mechanism of monthly FCA of July 2021, K-Electric filed a request with NEPRA and asked to approve 55paisa per unit hike in electricity price while K-Electric filed a separate request for quarterly adjustment for the quarter April-June 2021 in tariff on account of variation in power purchase price (PPP), impact of Transmission and Despatch (T&D) losses on fuel charges variation and annual adjustment on account of write-offs, adjustment for T&D losses, CPI-C etc. as per the mechanism provided in the MYT determination and sought 71paisa/unit increase under quarterly adjustment for the period starting from April to end in June 2021. Also, K-Electric has requested a gross write off of Rs 15,900 million for FY 2021.

NEPRA officials, during the hearing, said that K-Electric has violated the merit order in July 2021 which caused approximately Rs 99 crore and 98 lakh worth heavy burden.

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Representatives of K-Electric said that expansive fuel has to be used to avoid power load-shedding while around Rs 2 billion and 40 crore additional burden was due to increase in the prices of Liquefied Natural Gas (LNG) and furnace oil. They said that when a plant is not available then K-Electric has to utilize another available plant. They said K-Electric has been facing low gas pressure and Sui Southern Gas Company Limited (SSGCL) should improve its network/system. They said a new modern 900 MW power plant of K-Electric is in the final stage. The K-Electric is ready to obtain more electricity from the national grid but no assurance has been given regarding uninterrupted power supply, said K-Electric officials.

Voice chairman NEPRA Rafique Shaikh said that K-Electric should avoid referring the matter to the federal minister or to the Economic Coordination Committee (ECC) of the Cabinet for finding a solution.

It is relevant to note that the Karachi Chamber of Commerce has walked out in protest from the NEPRA’s hearing over not being permitted to speak. And, NEPRA chairman Tauseef H. Farooqi said that this forum is not meant for personal criticism and NEPRA will not take the decision due to your pressure.

Zubair Motiwala, a famous businessman, said that Tapal, Port Qasim and Gul Ahmed power plants have completed their life cycle and power price costs at Rs 18/unit by generating electricity from these plants.

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Ahmad Ahmadani
The author is a an investigative journalist at Profit. He can be reached at [email protected]

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