The citizens of Karachi may face an increase of Rs. 0.97 per unit electricity cost for the month of August as the power regulator completes the hearing for the fuel cost adjustment petition filed by K-Electric.
In the event of approving the Rs. 0.97 per unit increase for the month of August, Karachi’s electricity consumers will be burdened with Rs. 1.76 billion.
The National Electric Power Regulatory Authority (NEPRA) conducted an online hearing for a review petition filed by K-Electric (KE) to determine the cost of electricity under the monthly Fuel Cost Adjustment mechanism. KE had stated that the total units produced and the cost of electricity have increased due to a shortage of gas and running power plants against the merit order on imported furnace oil.
During the hearing, NEPRA’s officials said that documents submitted by KE show that 14 percent of the electricity had been generated through imported residual fuel oil, which had resulted in a higher generation cost for the month of August. The documents revealed that KE had violated the merit order maintained by the Ministry of Energy for power generation, resulting in a burden of Rs. 943 million on the consumers.
Low gas pressure had cost the company Rs. 618 million.
The NEPRA officials said that KE’s expansive electricity generation burden of Rs. 325 million would be incurred by the consumers.
The NEPRA instructed KE to resolve its natural gas supply issue with Sui Southern Gas Company within the stipulated time period or the government would fine it.
KE informed the authority that the National Transmission & Despatch Company is not supplying electricity above 1100 MW to the company, while NEPRA was of the view that KE is receiving less power than required by the company incurring losses. This is another inefficiency on account of the power distribution company for Pakistan’s largest metropolitan city of Pakistan.
KE’s representatives informed the NEPRA that they have made a ten-year development and expansion plan that will be presented to it.
The Chairman of the NEPRA, Tauseef H. Farooqi, said that the company is generating expansive electricity from its own power plants while getting relatively cheaper electricity from the National Grid. He sought an answer from KE on this issue, and it is to explain why it is resorting to expansive sources for electricity generation with three days.
The hearing of the monthly fuel adjustment has been completed and the NEPRA will issue its decision after examining the data. If the NEPRA approves KE’s claims for an increase in the tariff, a burden of Rs 1.97 billion for consuming expansive electricity will be placed on the residents of Karachi.
The NEPRA also sought replies from the commentators, to be submitted within seven days. These commentators are the representatives of the Karachi Chamber, the business community, civil society groups, and political parties including Jamaat-e-Islami Karachi Amir Hafiz Naeem ur Rehman.