ISLAMABAD - National Electric Power Regulatory has allowed K-Electric (KE) to increase power tariff by Rs 3.55 per unit on account of quarterly adjustments for the January-March quarter of 2021-22.

In its decision on the KE’s petition for a hike of Rs.3.892/unit, on account of quarterly adjustments for the quarter of January to March, NEPRA has allowed an increase of Rs 3.55/unit after making various adjustments. The NEPRA decision for an increase of Rs 3.55/unit in tariff has been communicated to the federal government for notification.

Pursuant to the provisions of Section 31(7) of the Regulation of Generation, Transmission and Distribution of Electric Power Act 1997, and as per the mechanism for monthly, quarterly and annual adjustments provided in the tariff determination of K-Electric Limited dated July 05, 2018, the authority has to review and revise the approved tariff on monthly, quarterly and annual adjustments.

For the quarter ending March 2022 KE initially requested Rs. 4.521/unit hike in tariff, however subsequently KE revised its request to Rs.3.892/unit after adjusting NEPRA’s FCA decision for February and March 2022 issued on May 6, 2022 & May 27, 2022 respectively.

As per the mechanism provided in the determination, impact of change in KE’s own generation fuel cost component due to variation in fuel prices, generation mix and volume shall be passed on to the consumers directly in their monthly bills in the form of fuel charges adjustment (FCA). Similarly, impact of change in the fuel component of Power Purchase Price (PPP) due as to variation in fuel prices and energy mix shall also be passed on to the consumers through monthly FCA. However, the impact of monthly variations in K-Electric own generations fuel cost component as well power purchase price to the extent of targeted T&D losses, not taken into account in the monthly FCAs, has to be adjusted on quarterly basis. In addition, the monthly variations in the variable O&M and fixed costs of the PPP, as allowed by the Authority, are required to be adjusted on quarterly basis.

The impact of these variations is to be worked out based on targeted units to be sold in the next quarter and to be adjusted in the SoT of K-Electric. The actual payments in respect of WWF, ‘WPPF etc. to the IPPs being passed through are to be adjusted on yearly basis upon production of verifiable documentary evidence. Pursuant to notification of the determined MYT, K-Electric filed its quarterly adjustment request on account of Power Purchase Price (PPP) and prices level reset for the quarter ending March 2022 along with supporting documents.

K-Electric in its adjustment has requested Rs.511.615 million for the energy purchased from Oursun. This included the impact related to insurance. KE in its request has claimed insurance component of Rs. 0.3944/unit for January — March 2022, whereas, the same was allowed by NEPRA for the period November 30, 2020 till November 29, 2021. As no new insurance component has been approved by the Authority for the period after November 2021, therefore, no cost is considered on account of insurance component amounting to Rs.9.320 million as claimed by ICE. Once the Authority approves insurance component for the period under review, KE may claim the amount accordingly in its subsequent request. For the capacity, K-Electric has claimed Rs. 331.151 million & Rs. 324.224 million for GAEL & TEL respectively. In the request while working out working capital GAEL & TEL in its invoice has used KJBOR rate of 10.54% whereas, rate of KIBOR is 10.52% is applicable. Therefore the rate of 10.52% has been considered. This has resulted in an impact of Rs. 0.103 million and Rs. 0.106 million for GAEL & TEL respectively.

Electricity price increase approved on account of quarterly adjustments for January-March quarter of 2021-22

KE in its adjustment request has claimed an amount of Rs. 403.822 million on account of EPP (excluding Fuel) and CPP for the purchases from Fauji Power Company Limited (FPCL). The same is being allowed as Rs. 399.671 million. The difference is in the month of January 2022, wherein, KE in its request has claimed the capacity charges as per reference decision dated May 15, 2017 and also claimed amount for water charges, ash disposal & limestone instead of CoD determination. Further, in line with the Authority vide decision dated February 9, 2022, wherein, the Authority has determined the components of water charges, ash disposal & limestone as ZERO, and the amount of Rs. 847.03 million allowed to FPCL on account of water charges, ash disposal & limestone till December 2022 has been deducted as part of previous adjustment.

K-Electric has requested previous adjustment of Rs. 145.57 million on account of KCCP Heat Rate impact July 2016 to June 2020 as per NEPRA’s decision dated January 22, 2022. The same is being considered on provisional basis subject to adjustment if any on the basis of final verification by NEPRA.

The Authority in determination dated June 8, 2022 in the matter of quarterly adjustments of K-Electric for the quarters ending September 2021 and December 2021 allowed Rs. 4,350 million to be allowed in every quarterly adjustment till March 2022 on account of approved revision in heat rate of BQPS I from July 2016 onwards. Accordingly, an amount of Rs. 4,350 million is also being made part of the instant adjustment as previous adjustment.

The Authority in determination dated June 8, 2022 in the matter of quarterly adjustments of K-Electric for the quarters ending September 2021 and December 2021 allowed Rs. 146 million to be allowed in every quarterly adjustment till September 2022 on account of WPPF of K-Electric.