ISLAMABAD: K-Electric has sought about Rs5.50 per unit increase in its tariff on account of monthly fuel cost adjustment (FCA) for November and quarterly tariff adjustment (QTA) for July-September 2021 to raise about Rs16 billion from consumers over the next three months.

The National Electric Power Regulatory Authority (Nepra) has decided to hold a public hearing on Jan 3 to examine whether the Karachi-based utility’s request for 32 paisa per unit additional FCA for November (Rs446 million) and Rs5.18 per unit (about Rs15.5bn) under the QTA was justified and if the company had followed economic merit order for power generation.

KE had originally demanded an increase of Rs4.94 per unit under the QTA but later raised it to Rs5.18 on the grounds that its original request was based on the latest FCA for the Central Power Purchasing Agency (CPPA) approved by Nepra for October available at the time of the request. However, this was subject to adjustments and had now been revised on the basis of CPPA’s November FCA now approved by Nepra.

The company also claimed about Rs762m additional QTA on account of Gas Infrastructure Development Cess (GIDC). The additional QTA involves overall operation and management and capacity costs worth about Rs6bn and about Rs9.4bn on account of fuel costs and power purchase price. These include O&M (operation & maintenance), PPP (power purchase price), capacity costs, uncovered cost of previous FCA due to non-adjustment of system losses, etc.

During the current billing month, KE consumers are already paying an additional FCA of Rs3.76 per unit on account of electricity they consumed in October. The upcoming FCA and QTA on approval by Nepra will be charged to consumers in January bill.

Under the tariff mechanism, changes in fuel cost are passed on to consumers only on a monthly basis through automatic mechanism and the QTA on account of variation in power purchase price, capacity charges, variable operation and maintenance costs, use of system charges and including impact of transmission and distribution losses are built in the base tariff by the federal government.

Published in Dawn, December 24th, 2021

Opinion

Editorial

Kurram atrocity
Updated 22 Nov, 2024

Kurram atrocity

It would be a monumental mistake for the state to continue ignoring the violence in Kurram.
Persistent grip
22 Nov, 2024

Persistent grip

PAKISTAN has now registered 50 polio cases this year. We all saw it coming and yet there was nothing we could do to...
Green transport
22 Nov, 2024

Green transport

THE government has taken a commendable step by announcing a New Energy Vehicle policy aiming to ensure that by 2030,...
Military option
Updated 21 Nov, 2024

Military option

While restoring peace is essential, addressing Balochistan’s socioeconomic deprivation is equally important.
HIV/AIDS disaster
21 Nov, 2024

HIV/AIDS disaster

A TORTUROUS sense of déjà vu is attached to the latest health fiasco at Multan’s Nishtar Hospital. The largest...
Dubious pardon
21 Nov, 2024

Dubious pardon

IT is disturbing how a crime as grave as custodial death has culminated in an out-of-court ‘settlement’. The...