The National Electric Power Regulatory Authority (NEPRA) has issued a notification about an increase in the base electricity prices for Karachi’s consumers.
Accordingly, the price of electricity is to be raised by Rs. 3.75 per unit for September. This increase was approved on account of the monthly fuel price adjustments.
With this notification, lifeline consumers using monthly electricity up to 50 units will not get the hit.
The decision of approving a fuel cost adjustment of Rs 3.75 per unit will cost Karachi’s electricity consumers to pay Rs. 7 billion extra in their December bills. The bills sent in December to K-Electric consumers will have this increase as well, as per the notification.
K-Electric reasoned that the shortage of gas and the increased production of expensive fuel like furnace oil (RFO) and high-speed diesel (HSD) pushed up the production cost, which resulted in the elevation of Rs. 3.75 per unit beyond the baseline tariff that was determined by the federal government.
The NEPRA has reprimanded power producing and power purchasing companies in its hearing tariff petitions for not using efficient plants, and highlighted a surge in the baseline tariff due to the shortage of imported LNG, which has forced power companies to produce electricity on expansive furnace oil.
It noted in its decision that K-Electric has failed to observe the merit order in terms of utilizing efficient power plants under its disposal, besides not investing in reducing line losses and theft.
Consumers in the petition also complained about the power distribution company’s inefficiency for not having a proper agreement to take electricity from the national grid. The agreement between the federal government and K-Electric remains suspended since 2012 when the Ministry of Power had reduced the power despatched to K-Electric from 600 MW to 300 MW.
K-Electric is currently withdrawing 1100 MW of electricity per month from the national grid through the court’s intervention.