K-Electric (KE) has formally requested an additional capacity of up to 300 MW from the national grid, which would increase their total supply to 1400 MW.
KE believes that this strategic move will lead to substantial net annual savings of approximately Rs 50 billion, a benefit that is expected to be passed on to consumers in the form of reduced Fuel Charges Adjustments (FCAs) and potentially lessen the Tariff Differential Subsidy (TDS) requirement for the Government of Pakistan (GoP).
As per a report by BR, the request for additional capacity was sent by KE’s CEO, Syed Moonis Abdullah Alvi, to the Minister for Power and Petroleum, Muhammad Ali. This development comes as a result of ongoing collaboration and discussions between KE and the relevant authorities regarding Pakistan’s energy sector.
Under the existing power supply arrangement, KE has been receiving between 1000 and 1,100 MW from the national grid. This allocation was based on a decision made by the Cabinet Committee on Energy (CCoE) on August 27, 2020.
However, KE’s CEO has highlighted key infrastructure improvements that have expanded the company’s capacity to draw power from the national grid. These enhancements include the completion of the cross-trip scheme at the NKI grid and the rehabilitation of the KDA-Jamshoro transmission line in 2021. As a result, the equipment and interconnection capacity increased to 1,300-1,400 MW, with 850 MW coming from NKI and 550 MW from Jhimpir-2, inclusive of N-1 contingency. This expansion was made possible through the upgrading of KE’s tie-in line of KDI Jamshoro by the National Transmission and Dispatch Company (NTDC), reconnecting KDA to Jhampir-2 to Jamshoro.
The ability of KE to receive an additional 200-300 MW from the national grid hinges on various factors, including the adequate voltage profile in the 220-kV network of Jhimpir/Jamshoro and the availability of dispatch from wind power plants. This additional supply is expected to reduce power costs within the KE system and help absorb the capacity costs in the national grid, particularly considering the recent lower power demand experienced on the national grid.
In a related development, K-Electric has requested a tariff adjustment of Rs 3.02 per unit for the April-June quarter of this year. The National Electric Power Regulatory Authority (Nepra) has accepted the petition for a public hearing scheduled for October 19 to thoroughly evaluate the justification for KE’s request. Nepra will also examine whether the company’s claim for a write-off of Rs 13.2 billion against unrecovered bills should be approved.
KE’s demand for the tariff adjustment is based on a revision in price settings, set at Rs 2.57 per unit during April-June. Additionally, an annual inflationary impact of 87 paise per unit for operations and maintenance has been factored in, on top of previously covered expenses in the base tariff, along with other adjustments.
The outcome of Nepra’s assessment will be forwarded to the federal government, which will make decisions regarding when and how the tariff adjustment will be implemented for consumers, or whether it could be partially set aside against the budgeted subsidy.
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