K-Electric submits fuel price adjustment claim to NEPRA

Karachi’s power utility, K-Electric (KE), has submitted a claim for fuel price adjustment (FPA) for April 2024 to the National Electric Power Regulatory Authority (NEPRA).

KE has proposed three options: decreasing the FPA by Rs. 0.74 to Rs. 1.18 per unit in two scenarios or adding Rs. 0.44 per unit to an already substantial request of Rs. 18.6 per unit increase for the period from July to March.

Through these options, KE aims to recover approximately Rs. 26 billion on a provisional basis to clear its backlog.

NEPRA will conduct a public hearing on the matter later this month to decide on the proposed adjustments. KE’s proposals include:

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1. Adjusting the Difference: Calculating the adjustment based on the difference between the actual fuel cost and the reference monthly fuel cost as per the current tariff.
2. Charging Consumers: Charging consumers the difference between the actual and reference monthly fuel costs as outlined in the tariff petition with NEPRA.
3. Annual Weighted Average: Adopting the difference between actual fuel costs and the annual weighted average fuel reference costs according to the tariff petition with NEPRA.

While awaiting the public hearing decision, NEPRA has already notified additional charges for June, July, and August.

An extra Rs. 1.90 per unit will be charged in June, followed by Rs. 0.93 per unit in both July and August as part of quarterly tariff adjustments.

These adjustments apply to all consumer categories except those using less than 100 units per month, who fall under the protected lifeline category.

NEPRA has approved positive quarterly adjustments totalling Rs. 46.6 billion for the third quarter of FY24, effective from June to August. Notifications have been sent to all distribution companies (DISCOs), including KE.

This ongoing adjustment process highlights the efforts to balance fuel costs and tariff requirements amid fluctuating energy prices.

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