The National Electric Power Regulatory Authority (NEPRA) has reduced electricity rates by Rs. 0.75 per unit for K-Electric (KE) consumers on account of fuel cost adjustment (FCA) for November 2021.
The authority has issued the notification, and the reduction would be adjusted in February bills for the Karachi electricity consumers. However, these rates will not be applicable to domestic consumers using up to 300 units of electricity and lifeline users. They will also not apply to agricultural consumers.
The notification read that negative adjustment on account of monthly FCA also applied to the domestic consumers, having Time of Use (ToU) meters irrespective of their consumption level.
The regulatory authority further mentioned that in case the incremental industrial and winter incentive package became applicable to the residents of Karachi, the amount of negative FCA allowed to such consumers would be adjusted in the subsequent adjustments of K-Electric.
“The negative FCA of November 2021 shall be shown separately in the consumers’ bills on the basis of units billed to the consumers in the respective month to which the adjustment pertains,” says the notification.
The authority maintained in its decisions that the main reason for EMO violation was observed to be “Less Drawl from NTDC/Simultaneous Operation of Expensive Plants.” It was observed the K-Electric had drawn less energy from NTDC during certain hours without reducing generation from expensive plants connected to its network. Accordingly, the financial impact due to the EMO violation events with respect to lesser drawl from NTDC, wherein KE has failed to provide satisfactory response amounts to Rs. 124.86 million.
The notification further detailed that regarding the cost of energy purchased from CPPA-G during November 2021, K-Electric has used the rate of Rs. 9.9 179/kWh. However, the Authority’s approved fuel cost component in the matter of XWDISCOs for November 2021 is Rs. 8.0401tkWh. In view thereof, while working out the instant FCA of K-Electric, the rate approved by the Authority for XWDISCOS for November 2021 has been incorporated for the energy purchased by K-Electric from CPPA-G during November 2021. This has resulted in a decrease in total fuel cost by around Rs. 1,380.49 million.
In its previous hearing, NEPRA had allowed K-Electric to collect Rs. 3.75 per unit on account of FCA for the month of September from the consumers of Karachi in the bills for December.
In its petition submitted to NEPRA on the basis of provisional data, K-Electric had sought an increase of Rs. 3.45 per unit in its power tariff under FCA for September 2021. K-Electric had requested the regulator — under the multi-year tariff 2017-23 — to allow the company to pass on the burden of Rs. 6.63 billion to the consumers in its service area under the FCA for September 2021.
On November 3, NEPRA conducted a public hearing on the K-Electric petition. During the hearing, K-Electric had submitted that at the time of submission of its FCA request, the authority’s approved fuel rate of XWDISCOs for the month of September was unavailable, and the utility company had used the available tariff for the petition.
K-Electric, accordingly, had requested that the amount claimed on the account of energy purchased from the CPPA-G be subject to adjustment based on the FCA decision of the authority in the matter of XWDISCOs for September. The K-Electric also submitted that the major reason for the high FCA for September was the increase in the prices of RLNG, RFO, and coal against the month of June.
After hearing and going through the K-Electric’s data, NEPRA had allowed an increase of Rs. 3.7571 per unit in the power tariff, an impact of Rs. 7.22 billion on the consumers.