KE Base Tariff May Rise by RS 10 Per Unit
Staff Report
The KE base tariff for consumers may go up by RS 10 per unit due to the multi-year tariff.
K-Electric has requested a total base tariff of RS 44.69 per kWh, reflecting an increase from the previous multi-year tariff where the base tariff was PKR 34.
The major cost component is the Cost of Power (EPP Component), which amounts to PKR 18.88 per kWh and is adjusted monthly and quarterly based on the cost of power.
The Cost of Power on account of the capacity payment (CPP) Component amounts to PKR 12.54 per kWh, with quarterly adjustments.
The Transmission Charge has been claimed at PKR 3.48 per kWh, varying quarterly based on transmission costs.NEPRA Approves KE’s Power Acquisition Program 2024-2028
The Distribution Charge has been calculated at PKR 3.84 per kWh and varies based on distribution costs.
- O&M (Operation and Maintenance): PKR 0.42 per kWh, indexed annually with the Pakistan Consumer Price Index (CPI).
The Retail Margin has been worked out at PKR 0.59 per kWh, adjusted yearly based on revenue recovery.
The Recovery Loss Allowance has been calculated at PKR 2.88 per kWh, including a cap and floor mechanism for under/over recovery.
The Working Capital has been PKR 2.07 per kWh, adjusted annually for over/under recovery scenarios.
Despite the request for adjustments in the tariff components, the actual price charged to customers on monthly bills is controlled by the government’s uniform tariff policy, ensuring consistent charges across customer categories.
The newly requested tariff adjustments are for the period from FY 2023-24 to FY 2029-30.
NEPRA has invited all interested or affected parties to provide comments within 7 days from the notice, as permissible under the law. This is part of the regulatory process to ensure transparency and stakeholder engagement before any final decisions on tariff adjustments are made.
KE stated that there will be no impact on customers from KE’s request for a supply tariff.
K-Electric reiterates that the company’s Supply Tariff petition to NEPRA will not impact customer bills. The request has been submitted under KE’s Multi-Year Tariff for the period from FY 2023-24 to FY 2029-30.
This petition outlines the various cost components necessary to ensure the reliable and efficient supply of electricity to a growing number of customers.
The price of electricity charged to customers in their monthly bills remains governed by the uniform tariff policy set by the government, which ensures the same charges for each customer category across the country.
As a vertically integrated utility responsible for managing the generation, transmission, and distribution of electricity, these costs comprise almost 90 percent of KE’s request.
These are crucial to ensure a steady and reliable supply of electricity to homes and businesses, with minimal disruption and efficient service.
The remaining components have been requested to further enhance the utility’s ability to maintain cash flows and account for operational risks due to changes in the macroeconomic situation, such as increases in KIBOR rates, while also fostering a culture of regular bill payments.
Distribution companies across Pakistan undergo a similar process under their Multi-Year Tariffs. The last determinations announced by NEPRA in this regard were in March 2024.
K-Electric’s Multi-Year Tariff petition is currently under deliberation by NEPRA. The company remains committed to driving efficiency and improvement in its business through a combination of innovative technologies and targeted investments.
