The National Electric Power Regulatory Authority (NEPRA) has approved an increase of Rs5.28/unit in power tariff for KE's consumers on account of Fuel Charges Adjustments (FCA) for April 2022.
In a public hearing, chaired by Chairman NEPRA Tauseef H Farooqi, the regulator has reserved the judgment on the KE's request for quarterly tariff adjustments (QTA) of Rs3.89/unit for the third quarter of current fiscal. The impact of both FCA and QTA will be around Rs27 billion on the KE's consumers.
Initially, the K-Electric had sought a hike of Rs4.86/unit under monthly fuel cost adjustment (FCA) and Rs4.52/unit under quarterly tariff adjustments (QTA) to collect an additional revenue of Rs27 billion from the consumers. In its separate petitions to NEPRA, the KE had sought Rs4.86/unit FCA for electricity consumed in April with a revenue estimate of Rs9.353 billion. It said the increase was on account of higher tariff of national grid and furnace oil cost for its own power generation.
In a separate petition, the KE also sought a quarterly tariff adjustment (QTA) of Rs4.52/unit on account of increase in weighted average cost of power purchases for January: March 2022 quarter with additional revenue impact of about Rs17.5 billion. The total impact of both adjustments was calculated to be Rs26.85 billion. However, later KE has upward revised the fuel cost adjustment (FCA) to Rs5.307/unit having an impact of Rs10.225 billion, while the demand under quarterly tariff adjustments (QTA) has been downward revised to Rs3.89/unit.
The KE claimed that major impact on the monthly FCA for April 2022 was due to an increase in the fuel price increase of furnace oil and national grid. The price of Furnace Oil in April 2022 has increased by 22 percent from March 2022. The price of electricity from national grid in April 2022 has increased by 17 percent. Official of KE informed the hearing that global oil prices rose 22 percent during April. Member Sindh Rafiq Sheikh asked that why K-Electric failed to generate electricity from alternative sources? KE's official said that they are working to generate 500MW of alternative energy. Member Sindh further commented that no work has been done on the coal lying in the neighbourhood of K-Electric.
| Impact of both FCA and QTA will be around Rs27b on KE's consumers
KE official said that the consumption of FO increased by 50 percent, while its cost hiked by 22 percent in April in comparison with March. Similarly, it was informed that the cost of power purchase from CPPA-G enhanced by 17 percent in April as compared to the previous month. Approval to increase electricity by Rs5.279/unit per unit has an impact of Rs10.173 billion. NEPRA has deducted Rs52 million from the demand on the basis of various adjustments. According NEPRA officials, Rs0.027/unit has been deducted on the basic of tariff adjustments while Rs0.001/unit has been made on account of under utilisation of efficient plants.
Official of NEPRA informed that violations of the merit order in April cost more than Rs1.13 billion. During hearing chairman NEPRA said that the basic tariff is not just for one company but for the whole country. The reasons for the increase in basic tariffs are well known. Chairman NEPRA said that said why load-shedding is being done at night. KE official said that only scheduled load-shedding is being carried during night and there is no unannounced load shedding. The demand for electricity at night is up to 3,500MW. The power shortage reaches up to 400MW during peak hours. NEPRA official said that the increase in tariff on account of FCA will be Rs5.28/unit, however the decision in the QTA will be made after verification of data.