KE seeks to recover additional Rs4.7 billion from consumers

Javed MirzaWeb Editor

16th Jul, 2021. 07:22 pm
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KARACHI: The K-Electric Limited has approached the power regulator, seeking to collect an additional Rs4.7 billion from the consumers on account of fuel charge adjustments (FCA) for the months of January to June 2021, an official document revealed on Friday.

The K-Electric has proposed to recover a total of Rs7.602 billion, as the fuel cost was higher in the months of January, February, March and June of 2021, and proposed to return/adjust Rs2.89 billion, as fuel costs were lower in the months of April and May of 2021, translating into the net recoverable amount of Rs4.7 billion.

“We have filed the petition with the regulator, and it would determine the process of recovering this amount, as well as the period during which the outstanding amounts would be recovered from the consumers,” a company spokesperson said.

The K-Electric also filed its requests for quarterly adjustments in tariff on account of variation in the power purchase price (other than fuel), impact of transmission and distribution losses as per the mechanism provided in the multiyear tariff; and proposed an addition of 36 paisas in the electricity tariff for the quarter January-March 2021.

As per the mechanism provided in the determination, the impact of change in the KEs own generation fuel cost component due to variation in the fuel prices, generation mix and volume would be passed on to the consumers directly in their monthly bills in the form of the fuel charge adjustments (FCA).

Similarly, the impact of change in the fuel component of the power purchase price (PPP) due to the variation in fuel prices and energy mix would also be passed on to the consumers through monthly fuel charge adjustments.

The K-Electric said the delay in the determination of monthly and quarterly tariff variations was significantly impacting the working capital position of the company, as the payments to fuel suppliers and Independent Power Producers (IPPs) were to be made timely and the differential had to be covered through borrowings, which had already reached an unsustainable levels.

The borrowings to fund operational and working capital requirements have reached an alarming level of Rs109 billion, which poses a serious threat to the operational sustainability of the company.

Moreover, delays in the determination also create complications in the recovery of these accumulated tariff variations from the consumers, as well as the government.

The National Electric Power Regulatory Authority (Nepra) would conduct a hearing on July 28, 2021 to determine whether the requested fuel price variations and quarterly variations are justified.

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