K-Electric seeks another Rs1.262/kWh hike in consumer tariff

Javed MirzaWeb Editor

25th Aug, 2021. 04:25 pm
K-Electric ventures into green

KARACHI: The K-Electric Limited (KEL) has sought another increase of Rs1.262/Kwh rise in electricity tariff for its consumers under the fuel charges adjustment (FCA) for July 2021 and April-June quarter of 2021.

According to the petition filed before the National Electric Power Regulatory Authority (Nepra), the power utility sought Rs1.09 billion adjustment, translating into Rs0.555/KWh increase in tariff. Moreover, Rs0.712/kWh increase is proposed against FCA for the quarter ended June 30, 2021. Nepra would conduct a hearing in this regard on September 2, 2021.

Earlier this month, the National Electric Power Regulatory Authority notified a net increase of Rs3.65/kWh under fuel charges adjustment.

These adjustments are applicable to all consumer categories except lifeline consumers, domestic consumers consuming up to 300 units and agriculture consumers of K-Electric. It is; hereby, clarified that the negative adjustment on account of monthly FCA is also applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.

The authority noted such variations need to be passed on to the consumers in a timely manner to ensure financial viability of the company, which otherwise, would result in piling up of the legitimate costs and may impact the financial viability of the company.

However, at the same time, the authority, in the interest of the consumers, needs to ensure that the consumers’ are not overburdened by passing on the allowed costs in one go,” Nepra noted in its determination.

As per the mechanism provided in the determination, the impact of change in the KE’s own generation fuel cost component due to variation in fuel prices, generation mix and volume would be passed on to the consumers directly in their monthly bills in the form of fuel charges adjustment.

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

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 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 unsustainable levels.

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