NEPRA reserves decision on K-Electric petition

The National Electric Power Regulatory Authority (Nepra) has reserved its decision on the requests of K-Electric to increase tariff by Rs6.52 per unit on account of quarterly and monthly adjustments. However, it sought to reduce tariff by Rs1.50 per unit.

The Karachi-based power utility had requested to allow an increase of around 37 paisa per unit in its normal tariff under quarterly adjustment for January-March 2021 period. According to petitions, K-Electric has pleaded to allow an additional charge of Rs1.98 per unit for electricity consumed in January, Rs2.495 for February and Rs1.497 for March and 21 paisa for June. These increases will result in about Rs7.62 billion in revenue for K-Electric.

However, the company has sought to reduce tariff on account of monthly fuel adjustment at 87 paisa per unit for April and 65 paisa per unit for May. It will result in a revenue loss of Rs2.9 billion. Following these adjustments, K-Electric will collect net additional revenue of Rs4.5 billion for the entire six-month period.

During the hearing, Nepra expressed dissatisfaction with the gas supply data by K-Electric and raised questions on costly power generation. The regulator also directed not to cut off power supply to any consumer for two months for non-payment of bill.

During the hearing, the Nepra chairman questioned why electricity was generated on high speed diesel during April to June 2021. He also asked why permission was not sought from Nepra before generating electricity from diesel.

The K-Electric COO said that it imported furnace oil to generate electricity with the permission of Power Division. However, the Nepra chairman asked why permission was not sought from the power regulator to use it as fuel.

“Nepra had given conditional permission to use electricity from diesel. Why did K-Electric take electricity from outside?”

The K-Electric authorities said that they first got cheap electricity from CPPA. “We also get electricity from other sources as per our requirements,” the officials added.

An additional burden of Rs1.12 billion was incurred. The K-Electric officials said that the company was facing a constant problem of gas shortage. The power utility company has written letters to Sui Southern Gas Company (SSGC) but the issue of gas supply with SSGC is still delayed. Until the issue of arrears is resolved through mediation, there can be no gas purchase agreement, K-Electric officials said. To this the Nepra chairman said that this means as long as the agreement does not mature, consumers of Karachi will continue to be charged more.

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