Electricity consumers in Karachi may see a reduction of up to Rs4.98 per unit in their bills as K-Electric (KE) has submitted a petition to the National Electric Power Regulatory Authority (Nepra) for a fuel cost adjustment (FCA) for November 2024.
If approved, the adjustment will offer consumers a total relief of Rs7.17 billion. The reduction is attributed to lower fuel prices and a shift in the generation mix.
Nepra has scheduled a public hearing on January 15 to review KE’s request. The hearing will examine whether KE adhered to the economic merit order in dispatching power from its plants and procuring electricity from external sources, including the national grid.
This is KE’s third consecutive request for a negative FCA adjustment, following reductions of Rs0.16 per unit for September and Rs0.27 per unit for October 2024. The company’s earlier FCA petition for October resulted in a provisional relief of Rs0.27 per unit, while Nepra also approved a Rs1.14 per unit negative adjustment for ex-Wapda distribution companies (DISCOs) for the same period.
The provisional Rs4.98 per unit adjustment for November reflects reduced reliance on furnace oil and adherence to the economic merit order. KE customers had generally paid lower rates compared to those served by other distribution companies over the past three years, a Nepra member noted during a recent hearing.
Fuel cost adjustments allow power utilities to pass variations in fuel costs to consumers, subject to Nepra’s scrutiny and approval. The process ensures that reductions in fuel costs benefit customers.
KE’s request is provisional, as its multiyear tariff (MYT) has yet to be finalized. The submission follows past practices for adjustments from July 2023 to September 2024. The regulator’s decision will determine the period over which the revised tariffs will be reflected in consumer bills.
