Nepra nod sought to give Rs12.08 billion refund to K-Electric consumers

The K-Electric has sought the National Electric Power Regulatory Authority (Nepra) nod for refunding Rs10.262 per unit to electricity consumers on account of fuel charges adjustment (FCA) for December 2022.

If allowed by NEPRA, the reduction will provide a relief of Rs12.08 billion to KE’s consumers which they will get in the electricity bills of February 2023. In its petition submitted to NEPRA, the KE has requested the regulator permission for the refund of the amount it had overcharged during the month of December 2022. NEPRA would hold a public hearing on the KE’s petition on January 30, 2023, to know if the requested fuel charges variation was justified and whether the company had followed the economic merit order (EMO) while giving dispatch to its power plants and power purchases from private power suppliers.

Meanwhile, a spokesperson of the company said for the past consecutive months, prices of fuels such as RLNG and furnace oil have seen a consistent decrease in the global market which is enabling KE to benefit its customer base. This is also possible due to the efficient and effective utilization of KE’s generation fleet to supply energy to Karachi.

The FCA is incurred by utilities due to global variations in the fuel prices used to generate electricity and change in the generation mix. Furthermore, the consumers also get benefits when fuel prices decline as compared to the reference month. The KE’s spokesperson has attributed the decline in December’s FCA due to reduction in the prices of RLNG, furnace oil, and power purchased from Central Power Purchasing Agency-Guaranteed (CPPA-G) by 17 percent, 15 percent, and 29 percent respectively as compared to September 2022.

This would be the sixth month in a row since July 2022 the regulator has instructed the K-Electric to reimburse the consumers’ specified per-unit charges. Interestingly, in its earlier decision for November’s FCA, Nepra decided to refund Rs7.43 per unit to consumers in their January 2023 bills with a total impact of Rs4.11 billion on the company.

It is worth mentioning here that for the months of October and September, the amount overcharged during the monthly bills were refunded to consumers on NEPRA’s direction. For the month of October, the Nepra had directed the company to refund Rs2.456 per unit to consumers in their December bills on account of FCA. The decision had a total impact of Rs4.11 billion. Similarly for September 2022, the regulator had directed the company to refund Rs5.126/unit to the consumers clients in their November bills with an impact of around Rs9 billion.

For August, the KE was directed to refund Rs4.8862/unit to consumers, on account of monthly FCA, having an impact of around Rs8.5 billion. Similarly, for July 2022, the regulator asked the KE to pay back Rs4.117/unit to consumers on account of FCA. However for June 2022, the Nepra had allowed KE to collect an additional Rs11.102/unit with a combined impact of Rs25 billion from the consumers. For May’s FCA too, the regulator had asked the KE to charge an extra Rs9.518/unit on account of monthly FCA.

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