ISLAMABAD-The National Electric Power Regulatory Authority (NEPRA) has allowed an increase of Rs2.87 per unit in K-Electric tariff on account of quarterly adjustments.
K-Electric had requested an increase of Rs5.170 per unit on account of quarterly adjustments for the third quarter(Jan to March) of FY2022-2023. NEPRA has worked out quarterly adjustment of Rs 3.37 per unit, however with the reversal of previous quarter amounting to Rs 0.5055 per unit, the net impact of increase in electricity rates will be Rs 2.8680 per unit, said a decision of Nepra in the matter of Quarterly Adjustments of KE for the Quarter ending March 2023.
It is worth noting here that this is the second increase on account of quarterly adjustments approved by the Nepra as last week, the authority had approved a federal government’s motion for a hike of Rs1.25 per unit in tariff on account of the third quarter (Jan to March) adjustment of FY2022-2023. Nepra had conducted a public hearing on KE’s petition for a hike of tariff on account of QTA on May 31, 2023. Regarding cost for the energy purchased from national grid, K-Electric has claimed an amount of Rs.19,646.42 million including capacity charges and variable O&M. K-Electric has requested an amount of Rs.8.143 million as previous adjustment of MoF for the quarter July 2022 to December 2022, due to the change in MoF rate, from Rs.1.71/kW/M to Rs.2.77/kW/M. The same has been accounted for as part of current quarter cost, as the same has been billed by CPPA-G to KE during the instant quarter i.e. January to March 2023. Accordingly, the Authority has decided to allow the aforementioned amount of Rs.8.143 million due to revision in market operator fee rates.
K-Electric, in the instant quarterly adjustment claimed an amount of Rs.1,142 million due to the fact that impact of negative FCA for July 2022 earlier not passed on to the residential consumers up-to 300 units, has now been passed on to such consumers in light of NEPRA’s decision dated March 09, 2023 regarding staggering of FCAs of KE. Here it is pertinent to mention that as per practice, the amount of negative monthly FCAs is not passed on to the residential consumers consuming upto 300 units. However, the federal government in its motion on February 16, 2023 requested the Authority to pass on the impact of negative FCA to residential consumers as well. The authority has made an amount of Rs.1,142 million claimed by KE as part of the instant quarterly adjustment. KE had requested adjustment of tax on undistributed reserves for the FY 18 and FY 19 amounting to Rs 686 million and Rs 444 million respectively, through quarterly adjustment for the quarter ended March 2023. The company had further submitted that in case of reversal of decision by the Supreme Court of Pakistan, KE will have the right to claim back this amount in subsequent periodic/quarterly adjustment. Based on the above, a negative amount of Rs. 1,130 million (Rs.646+444= 1130 million) has been adjusted as previous adjustment in the quarter ending March 2023. K-Electric had requested NEPRA to allow cost of Insurance Premium of around Rs.9.727 billion, in light of the KE’s determination October 9, 2017, as a separate period cost in the next quarterly adjustment. The amount claimed by KE includes decision of the authority in the matter of quarterly adjustment of K-Electric for the quarter ending March 2023 premium paid to Sinosure to provide coverage for Chinese component and to Euler Hermes for providing coverage for German component.
The Authority after considering the submissions of K-Electric has decided to condone the delay in filing of the request by KE and has decided to allow the premium paid to Sinosure for coverage of the Chinese component and to Euler Hermes for providing coverage for the German component of financing. The Authority has further decided not to allow the withholding tax being adjustable. NEPRA has also decided to allow an amount of Rs.9.146 billion, to K-Electric, as cost of debt-insurance premium as a separate cost in the instant quarterly adjustment i.e. quarter ending March 2023. K-Electric in its request has requested its quarterly adjustment based on the projected units to be sold in the next quarter of 4,881 GWh. Now KE has provided its actual sent out units for the months of April — June 2023, which after adjusting for allowed losses works out as 4,458 GWh. Accordingly the same have been used in calculation of quarterly adjustment.
Similarly, the cost of operation of unit-3 of BQPS-I, which was earlier deducted by the Authority amounting to Rs. 1,425 million for the period from June to August 2021, is included in the instant quarterly adjustment i.e. quarter ended March 2023. The decision is being sent to the federal government for intimation and action, if any, by the federal government under Proviso (ii) of Section 31(7) of NEPRA Act, before its notification by NEPRA pursuant to the said Proviso of Section 31(7) of NEPRA Act, 1997. Meanwhile, KE in a statement said that under the Uniform Tariff Policy applicable across the country, the QTAs impact is generally not passed on to customers. However, a formal decision will be issued by the government.