The National Electric Power Regulatory Authority (Nepra) on Wednesday firmed up about 97 paisa per unit additional monthly fuel cost to be recovered from consumers of K-Electric next month.
However, it put on hold the final judgment for a couple of days to cross-examine some additional information they sought from the K-Electric. The additional fuel cost adjustment (FCA) is on account of higher cost of electricity consumed in the month of August.
In a public hearing on a petition filed by K-Electric presided over by Chairman Nepra Tauseef H. Farooqui, the regulator noted that expensive electricity was generated through expensive fuel in August and efficient plants were not fully utilised. Member Sindh Rafique Shaikh and Member Khyber Pakhtunkhwa Maqsood Anwar Khan also participated.
In its petition for 98-paisa per unit increase in power tariff under monthly FCA, the company reported that the cost of electricity had gone up due to shortage of gas and resulting in running of power plants against the merit order, on imported furnace oil.
The Nepra case officers said the K-Electric petition showed that 14pc electricity was generated through RFO which resulted in higher generation cost. They said K-Electric violated the merit order, maintained by Ministry of Energy, for power generation, and resulted in a burden of Rs943 million to the consumers. Low gas pressure had an additional cost to the tune of Rs618m while generation from expensive power sources resulted an additional cost of Rs325m.
The regulator instructed K-Electric to resolve natural gas supply issue with Sui Southern Gas Company (SSGC), if it was not resolved within stipulated time period, fine would be imposed on K-Electric in future FCAs.
The KE’s officials said the National Transmission and Despatch Company (NTDC) was not providing more than 1,100MW to Karachi. They said about 14pc electricity was produced through furnace oil. They also explained that efficient power plants could not be fully utilised during low gas pressure.
The Nepra chairman observed that the company was generating expensive electricity from its own power plants and wondered why it was not secure relatively cheaper electricity from the national grid. He directed the power utility to provide a written reply on the issue within three days and if dissatisfied the regulator would slash its equivalent cost.
The KE said the required increase in FCA was also on account of hike in RLNG prices. The regulator noted that more efficient power plants were not fully utilised. Amir Ghaziani, CFO KE, informed that the more efficient plants were not operated because of low pressure of gas. He said the KE was making timely payments and SSGC should ensure high gas pressure.
The chairman Nepra further said that KE is taking major share of its electricity from the national grid and questioned why you don’t close you expensive power plants? KE is taking free electricity supply from the national grid as there is no power supply agreement between the federal government and the company, the chairman Nepra said. The federal government and KE should resolve the matters pertaining to power supply agreement, he added.