FCA of May: Karachiites may bear Rs11.34 per unit hike in power tariff

K-Electric has asked the National Electric Power Regulatory Authority (NEPRA) to jack up the electricity price by colossal Rs11.34 per unit on account of fuel charge adjustment (FCA) for the month of May 2022.

As per details, Karachiites should get ready to bear a heavy jolt in the form of electricity price hike as the K-Electric (KE) has sought huge hike in the power price by Rs11.34 per unit from NEPRA and the authority (NEPRA) has called a hearing to consider the matter on July 4, 2022.

According to sources, if the NEPRA allows the requested power tariff hike then the consumers of KE will find an additional burden of approximately Rs23 billion under the head FCA of the previous month of May 2022.

However, they added that protected lifeline consumers of K-Electric will not be affected with this proposed power tariff hike if NEPRA grants its approval in this regard while this requested increase in power price will be applicable for only one month.

As per the definition of lifeline consumers by National Electric Power Regulatory Authority (NEPRA), lifeline consumer means those residential consumers having single phase electric connection with a sanctioned load up to I kilowatt (KW) and the lifeline consumers to include residential Non-Time of Use (Non-ToU) consumers having maximum of last twelve months and current month’s consumption is equal or lesser than 100 units.

NEPRA, in a notice for hearing, has invited all the interested/affected parties to raise written/oral objections as permissible under the law.

According to KE, the major impact on the monthly FCA of May 2022 is due to an increase in the fuel price increase of furnace oil and power purchased from the Central Power Purchasing Agency (CPPA). The price of furnace oil in May 2022 has increased by 38 percent from March 2022 while the price of Re-gasified Liquefied Natural Gas (RNG) between March to May 2022 has increased by 50 percent.

The price of electricity from CPPA in May 2022 has increased by 53% and the price of CPPA as of May 2022 is Rs 13.897/KWh as compared to the price of Rs 9.387/ KWh in March 2022.

Fuel Charge Adjustment (FCA) is incurred by utilities due to global variation in fuel prices used to generate electricity and change in the generation mix. These costs are passed through to the consumers following NEPRA’s scrutiny and approval and are one-time charges. Consumers also receive a benefit when the cost of fuel decreases.

As per NEPRA guidelines, the submissions of KE will be discussed in the public hearing scheduled to be held on the 4th July and the regulator is likely to approve the KE request after necessary scrutiny of the data and issue instructions on the period during which these costs can be applied to consumer bills, said the KE.

On June 14, National Electric Power Regulatory Authority (NEPRA) scrutinized a colossal Rs5.28 per unit increase in the power tariff for the electricity consumers of K-Electric (KE) on account of Fuel Charges Adjustment (FCA) of April 2022. However, NEPRA has so far not issued its detailed judgement on the FCA of April 2022.

It is pertinent to mention that NEPRA on 9th June 2022 had already approved a colossal Rs7.82 per unit increase in the power tariff for the consumers of K-Electric on account of quarterly adjustment for the quarters ending September 2021 and December 2021. Similarly, NEPRA on May 27 had notified Rs4.8269 per unit for the electricity consumers of K-Electric (KE) on account of Fuel Charges Adjustment (FCA) for the month of March 2022 having an impact of Rs7,862 million, to be recovered in the bills of June 2022 from the power consumers of K-Electric.

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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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