KE Seeks Rs 3:09 Per Unit Increase
Islamabad: K-Electric (KE) has sought increase in electricity rates of Rs. 3.09 per unit on account of fuel adjustment for month of July 2024.
The National Electric Power Regulatory Authority (NEPRA) on Thursday conducted a hearing for KE customers on account of fuel charges adjustments (FCA) for the month of July 2024.Restructuring of Engro and Dawood to take effect from Jan 1, 2025
KE has requested Rs. 3.09/kWh to be charged from customers in their electricity bills and presented their case through their head office in Karachi along with CEO, Moonis Alvi.
Various business community leaders urged provision of such as natural gas to KE in order to reduce FCA charges for Karachi customers.
NEPRA had earlier announced for a public hearing for issues framed pertaining to the justification of the FCA and whether the power utility had followed the merit order while giving dispatch to its power plants and power purchases from external sources.
During the hearing Rehan Jawed, representing the Korangi Association of Trade and Industries (KATI) praised KE for securing what he described as the lowest tariff for its renewable energy projects in the country’s history while setting a new benchmark.
However, further pointed out that if the government had embraced a similar competitive bidding process five or ten years ago, the current energy crisis being faced at the national level might have been averted.
He lamented the disparity between KE’s Fuel Charge Adjustments (FCA) and that of other DISCOs, which have recently diverged significantly due to changes in reference pricing and rebasing. This he said is creating confusion for Karachi’s customers.
Rehan said that an FCA set at PKR 3 means a bill that should have been PKR 300,000 skyrockets to PKR 900,000, underscoring the unsustainable financial strain on industries. The industrialist further highlighted the impact of high electricity costs on Karachi’s competitiveness, stating that local industries are unable to compete with their counterparts in Punjab due to soaring production costs.
He suggested that if FCA was fixed at PKR 1 until KE’s tariff is finalized, the rest could be covered by a government subsidy, advocating for immediate relief. Adding to the woes, Rehan criticized the gas allocation policy, which, according to him, has diverted gas meant for KE to captive power plants, leaving over 35,000 industrial consumers in Karachi to bear the brunt. He speculated that had the promised gas of 130 mmcfd been given, the FCA could have been negative Rs. 5, stressing the missed opportunity for cost savings.
Tanveer Barry from Karachi Chamber of Commerce and Industries (KCCI) echoed these sentiments, expressing frustration over the inequities faced by Karachi’s industries. He noted that while DISCOs’ FCA was in the negative, Karachi’s FCA stood at PKR 3, exacerbating the financial strain on the city’s businesses. “Karachi is being treated as a stepchild,” Barry remarked, highlighting the delayed processing of net metering applications and the burdensome fixed charges imposed on idle industries. He questioned why Karachi industries are being forced to pay surcharges on their KE bills, despite having no connection to the reasons behind them. Barry’s frustration was evident as he called for an end to what he perceives as the mistreatment of Karachi’s business community.
He said that the cries for fairness and relief echo loudly from the heart of Pakistan’s largest metropolis, demanding urgent action.
In response to a question about the agreement between SSGC and KE, company officials explained that the matter is under deliberation between both organisations. Meanwhile KE is making timely payments on current bills for gas consumed in power generation.
