National Electric Power Regulatory Authority (Nepra) is likely to allow KE to increase quarterly tariff by Rs 4.80 per unit for first quarter (July-September) of current fiscal, whereas Paisa 75 per unit for November under FCA mechanism will be refunded to consumers.

The regular took this decision in principle, after holding a public hearing on tariff adjustment requests of Karachi Electric. KE had sought an increase of Rs5.18 per unit for first quarter (July-September) of current fiscal year under QTA mechanism and Paisa 32 per unit increase in FCA for November 2021.

During the hearing, Chairman Nepra sought update on Gas Sale Purchase Agreement (GSPA) between KE and SSGC. KE officials informed that parleys on gas agreement with SSGC are in progress. Chairman, Nepra, who is pressing KE since long for GSPA agreement with SSGC, again urged the power utility to proceed ahead on the pact.

“Forget the past and proceed ahead on gas agreement with SSGC,” said the Nepra chief. He maintained that KE should also operate its own plants instead of only relying on cheap electricity from national grid. Nepra’s technical team informed that consumers have been overburdened with Rs3.25 billion due to less gas pressure from August 2021.

Member Sindh, Rafique Ahmad Shaikh sought clarification from KE officials whether the issue of gas pressure is hurting interests of consumers? KE officials replied that gas pressure issue is linked to investment by the gas company.

KE officials further informed that initial understanding has already been reached 2,050 MW electricity from national grid. The pacts will be given final shape in the days to come. KE will sign three agreements with NTDC, CPPA-G, etc. KE officials apprised the regulator that first unit of 450 MW of 900 MW RLNG-fired combined cycle plant will start commercial operation.

The quarterly adjustment consists of Rs 4.30 capacity charges, while according to NEPRA data the quarterly adjustment will affect consumers. Likewise, the K-Electric had requested an increase of 32 paisa per unit in electricity price in the context of November’s monthly fuel adjustment. Chairman Nepra also remarked that new system is being introduced for those organisations which use more electricity.

Tanveer Barry chairman Public sector utilities Power and gas Sub Committee KCCI rejected any increase in fuel adjustment charges of K electric. He said that any further increase in FCA and the industry will not survive because in 2021 base tariff was already increased and if Nepra allows any increase in FCA the industries will shut down and protest in front of Nepra Tower Islamabad.

He said that the KE is generating expensive electricity. KE average fuel cost is 12.41/ kW and CPPA fuel cost is 3.24 to Rs 6.06/kW. KE reported T&D losses are 17.54% - more than given target by Nepra.

He contended that KE has failed to operate its RLNG 660 MW Bin Qasim power plant; 74,088 TOU meters are still pending to be installed. Nepra received 5213 complains against KE in 2021.

This story was first published in Business Recorder on Jan 4, 2022.