KE Consumers to Face Rs 19 Hike Per Unit
Staff Report
The delay in determining the tariff by the power regulator is going to cost KE consumers an increase of around Rs 19 per unit on account of fuel adjustment.
The national electric power regulatory authority (Nepra) has failed to decide on the power tariff of KE for nine months, resulting in a piled-up increase of Rs 19 per unit.
Nepra has announced a public hearing on May 9, 2024, for the petition submitted by K-Electric regarding provisional monthly fuel charge adjustments (FCA) for the period July 2023 to March 2024. KE’s multi-year tariff is currently under Nepra’s review.
Consumers of other power distribution companies (Discos) have already paid their share in their monthly adjustments granted by Nepra to the CPPA-G, around PKR 27 per unit, while CPPA-G’s request for March FCA at Rs 2.94 per unit is also under review by Nepra.How to Access KE Duplicate Bills Online for 2024 (Updated January)
K-Electric has proposed three scenarios to the power regulator to mitigate the accumulative effect of increased electricity rates on consumers. Under the first scenario, KE proposes calculating FCA as the difference between actual fuel cost and the reference monthly fuel cost as per the interim tariff.
In the second scenario, it suggests considering the difference between the actual and reference monthly fuel cost as per the tariff petition filed by KE and currently under Nepra’s deliberation.
The third scenario proposes considering the difference between actual fuel cost vs. annual weighted average fuel reference costs, as per the tariff petition filed by KE and currently under Nepra’s deliberation.
Consumers of KE will face a total Rs 18.57 per unit hike if Nepra approves the first scenario, while they will face a Rs 18.57/unit increase if Nepra approves the second scenario and a Rs 16.9/unit hike if Nepra allows the third scenario for the period from July 2023 to March 2024.
The extended delay in determining KE’s tariff by Nepra has prompted the power utility, serving Karachi’s 3.5 million customers, to propose three scenarios for the regulator’s consideration to facilitate timely cost recovery and avoid further accumulation of adjustments to be recovered from consumers.
Since the NEPRA notification and final determination are pending, KE’s bills dispatched to its customers carry a notice every month.
The notice explains that KE’s Investment Plan and Multi-Year Tariff (MYT) for the period starting from July 01, 2023, are under process. Accordingly, no amount in respect of FCA for July 2023 or onwards is presently included in the current electricity bill, and the same will be applied/recovered with future bills by regulatory approval. All consumers are notified accordingly.
K-Electric (KE) has requested fuel charge adjustments (FCA) for nine months, proposing an increase in electricity prices for seven months and a reduction in power tariffs for the remaining two months, covering the period from July 2023 to March 2024.
NEPRA will hear KE’s plea on May 9, and following the hearing, NEPRA will issue a notification determining how the FCA will be calculated and instructions on how they will be applied to customer bills.
In a public hearing notice, NEPRA has invited all interested/affected parties to raise written or oral comments as permissible under the law at the hearing.
It is pertinent to mention that Fuel Charge Adjustments (FCA) are incurred by utilities due to global variation in fuel prices used to generate electricity and changes in the generation mix.
These costs are passed through to customers following NEPRA’s scrutiny and approval. The request for FCA is due to the utilization of fuel sources based on economic merit order and changes in fuel prices.
