ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has postponed its decision to grant a relief of PKR 6.62 per unit to K-Electric consumers under the monthly fuel charges adjustment (FCA) for February 2025, as it concluded a hearing on the request of Karachi-based power utility.
Following a public hearing, the power regulator will issue a decision clarifying the FCA amount to be passed on to customer bills and the period for which it will be applicable.
Approval of the petition would allow KE consumers to benefit from a reduction of almost Rs 6.662 billion. KE maintained its position of partial adjustment due to accumulated costs, a sentiment opposed by industrial stakeholders.
KE’s request for partial adjustment is made on the principle that these adjustments may arrive during peak summer months, and out of prudence, this cushion is being created for the customers during a period where electricity consumption and, therefore, bills are higher.
Fuel charge adjustments are incurred by utilities due to global variations in fuel prices used to generate electricity and the changes in the generation mix. These costs are reflected in customer bills following NEPRA’s scrutiny and approval. Customers also benefit from negative FCA in their bills when global fuel prices decrease. Rates charged to customer bills are determined by NEPRA and notified by the federal government.
KE has also highlighted the adjustments regarding part load, degradation curves, and startup costs pursuant to the determination of the Generation Tariff of Power Plants of KE for the period post June 2023 and requested NEPRA to consider the recovery of the same from negative fuel cost variation to ensure that consumers are not burdened at a later stage.
As per the regulator’s decision, the negative FCA shall be applicable to all the consumer categories except lifeline consumers, domestic protected consumers, Electric Vehicle Charging Stations (EVCS), and prepaid electricity consumers of all categories who opted for prepaid tariff.Â
During the hearing, which was held on Wednesday to determine the provisional FCA for February 2025, the industrial stakeholders have pushed for expediting the approval of the Multi-Year Tariff to stabilize industrial planning and forecasts.
Industrial representative, Rehan Javed, explained that developing a production plan around provisional numbers hinders productivity and growth, affecting the economic growth of the country.
Addressing queries on the petitioner bearing the cost of independent verification, KE’s Chief Executive Officer, Moonis Alvi, highlighted that it is a global practice. The applicant has to cover the cost of any verifications and feasibility studies, e.g., environmental risks, during loan applications for new projects.
Addressing concerns over capacity payments being made in the generation tariff, NEPRA officials clarified that capacity payments have been a part of the tariff, calculated on the basis of availability. Previously, visibility was restricted as NEPRA shared a one-rate tariff as opposed to the new regulations, where the tariff is broken down into components.
Tanveer Barry, Vice President KCCI, highlighted the need forthe timely sharing of data by NEPRA in order for stakeholders to raise concerns accordingly on delays.
NEPRA officials also clarified that there are no delays on NEPRA’s end with regard to Service Level Agreements, sharing in detail a timeline with which NEPRA has expedited the process.
Upon the question of whether this relief is incorporated within the government’s announced tariff cut, NEPRA officials explained that this was an additional relief that KE was providing its consumers with.Â
Later, the authority reserved its decision, which would be issued after reviewing the data and submissions presented by the KE during the hearing.
