Nepra hikes power tariff by Rs10/unit for Karachiites

ISLAMABAD: Bad news for Karachiites as the National Electric Power Regulatory Authority (NEPRA) has increased the electricity price by Rs 10.1022 per unit.

NEPRA has notified the power tariff hike on account of the fuel charges adjustment (FCA) for nine months, spanning from July 2023 to March 2024, and will be recovered from K-Electric (KE) consumers over four months from July to September 2024.

According to the notification, KE will charge its consumers Rs 2.6761 per kilowatt hour (kWh) in June 2024, Rs 3.1057/unit in July, Rs 3.2242/unit in August, and Rs 0.9980/unit in September 2024. The increase in power tariff will apply to all consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers. 

The adjustment will be shown separately in consumers’ bills based on units billed in the respective months to which the adjustment pertains. KE will reflect the fuel charges adjustment in the billing month according to the specified schedule. Additionally, KE must comply with court orders while implementing these adjustments.

Earlier, KE had requested fuel charge adjustments (FCA) for nine months, proposing an increase in electricity prices for seven months and a reduction for the remaining two months within the period from July 2023 to March 2024.

According to KE, the proposed FCA could impact customers by Rs 1.6 to Rs 2 per unit per month over nine months, compared to an average FCA of Rs 2.83 per unit applied by other power distribution companies (DISCOs) during the same period.

KE proposed three scenarios for calculating the FCA: the first scenario suggested calculating the FCA as the difference between the actual fuel cost and the reference monthly fuel cost as per the interim tariff. 

The second scenario proposed considering the difference between the actual and reference monthly fuel cost per the tariff petition filed by KE and currently under NEPRA’s deliberation. 

The third scenario proposed using the difference between actual fuel cost versus annual weighted average fuel reference costs as per the tariff petition filed by KE and currently under NEPRA’s deliberation.

It’s crucial to note that FCAs are routine procedures reflecting changes in the generation mix and global fuel prices used for electricity generation. NEPRA makes and notifies final determinations regarding FCAs, preventing individual distribution companies from unilaterally determining or modifying FCAs.

Pursuant to Section 31(7) of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, as amended by the 2011 and 2018 Acts, and following the monthly, quarterly, and annual adjustment mechanisms in the K-Electric Tariff Determination of July 5, 2018 (notified in the official Gazette via SRO No. 576(1)/2019 on May 22, 2019), the National Electric Power Regulatory Authority (NEPRA) has adjusted the approved tariff for K-Electric Limited to account for variations in fuel charges from July 2023 to March 2024. Given that these FCAs cover nine months, NEPRA has decided to stagger their recovery over four months.