KE Consumers To Face Rs 1.7 Per Unit Increase in Electricity Rates

Staff Report

K-Electric consumers are set to face an additional increase of Rs 1.70 per unit in electricity tariffs due to quarterly adjustments for the first quarter of 2023-24.

The National Electric Power Regulatory Authority (NEPRA) will hold a public hearing on November 14 to review the quarterly adjustments for the first quarter of 2023-24 for both Ex-WAPDA distribution companies (XWDiscos) and K-Electric.

Following the policy guidelines issued by the Federal Government, which mandate the application of uniform quarterly adjustments, NEPRA stated that the adjustments determined for XWDiscos would also be applicable to K-Electric consumers.

Initially, NEPRA issued a hearing notice for XWDiscos but subsequently included K-Electric in the process through an addendum.

XWDiscos sought NEPRA’s approval to transfer an additional burden of Rs 22.56 billion to electricity consumers, citing variations in capacity charges, variable operation and maintenance (O&M) costs, additional recovery on incremental sales, use of system charges, market operator fees, and Fuel Cost Adjustment (FCA) impact on Transmission and Distribution (T&D) losses for the first quarter (July to September) of 2023-24.

In a petition submitted to NEPRA, the Central Power Purchasing Agency (CPPA) requested the transfer of Rs 22.56 billion to electricity consumers on account of these quarterly adjustments, acting on behalf of XWDiscos.

Out of the total additional amount, XWDiscos sought permission to collect Rs 12.126 billion from its clients as capacity charges.

This amount is allocated to Independent Power Producers (IPPs) to cover the cost of electricity not injected into the national demand due to system constraints or low electricity requirements. Check KE Duplicate Bill |K-Electric Duplicate Bill 2023

Additionally, consumers will also bear Rs 4.617 billion as variable O&M costs, Rs 6.617 billion for T&D losses on monthly FCA, and Rs 10.247 billion for use of system charges and market operator fees.

Notably, as per the authority’s decision on November 3, 2021, regarding the Winter Incentive Package, “No quarterly adjustments would be applicable on incremental consumption.”

The impact of incremental units for the quarter has been calculated at a negative Rs 11.047 billion, representing the cost of units purchased for industrial incremental sales.

Data shared with NEPRA by CPPA-G indicates that IESCO demanded recovery of Rs 5.542 billion, LESCO Rs 10.308 billion, FESCO Rs 4.189 billion, PESCO Rs 2.096 billion, TESCO Rs 1.195 billion, HESCO Rs 1.056 billion, SEPCO Rs 926 million.

MEPCO and QESCO have shown savings of Rs 520 million and Rs 2.625 billion, respectively. NEPRA will conduct a public hearing on the CPPA-G petition on November 14. Typically, positive adjustments due to quarterly adjustments are recovered from consumers within three months.

If the request for the increase of Rs 22.56 billion is approved, it will burden XWDiscos consumers by Rs 1.70 per unit. This impact will also be transferred to K-Electric consumers. The increase will apply to all electric consumers in Pakistan, except those classified as lifeline users.