Islamabad - Karachiites have to pay an additional Rs0.6890 per unit in their November electricity bills under monthly Fuel Charges Adjustments for July 2021, while two more monthly FCA’s for the cumulative increase of Rs4.432 per unit are in the pipeline. 

National Electric Power Regulatory Authority (NEPRA) on Tuesday allowed K-Electric (KE) to increase power tariff by Rs0.6890 per unit on account of monthly FCA for the month of July 2021. The authority has approved FCA of Rs0.6890 per unit for the month of July 2021 having an impact of Rs1.355 billion, to be recovered in the bills of November 2021.The FCAs shall be applicable to all the consumer categories except lifeline consumers.

It is worth to mention here that the total cumulative increase sought by KE on account of monthly FCAs for the months of July, August and September was Rs5.121 per unit. For the month of July, KE had requested an increase of Rs0.555 per unit on account of monthly FCA with an impact of Rs1.091 billion on power consumers. For the August fuel charges adjustment, the decision on KE’s petition, for an increase of Rs0.978 per unit in power tariff, is pending with NEPRA. If approved, the KE will pass on the burden of Rs1.765 billion to the power consumers in its service area. Similarly, NEPRA hearing is due on, November 3, 2021, on another petition of KE for an increase of Rs3.454 per unit in power tariff under fuel charges adjustments (FCA) for the month of September 2021. In case NEPRA allowed the KE to pass on the burden of Rs6.639bn to the power consumers in its service area under monthly FCA for September 2021. It means that the KE consumers have to pay an additional Rs9.76 billion in next three months on the account of monthly FCA.

Authority approves FCA of Rs0.6890 per unit for month of July 2021 having an impact of Rs1.355b, to be recovered in bills of Nov 2021

For July FCA, NEPRA had conducted public hearing, and has analysed the FCA claim of K-Electric. K-Electric had requested that the amount claimed on account of energy purchased from CPPA-G is subject to adjustment based on the FCA decision of the authority in the matter of XWDISCOs for July 2021. Regarding cost of energy purchased from CPPA-G during the month of July 2021, K-Electric has used the authority’s approved rate of XWDISCOs for the month of June 2021 instead of July 2021. K-Electric, during the hearing, submitted that at the time of submission of FCA request by K-Electric, the authority’s approved rate of XWDISCOs for the month of July 2021 was not available; K-Electric accordingly requested to consider the rate of July 2021, once it is approved by the authority. In view thereof, while working out the instant FCA of K-Electric, rate approved by the authority for XWDISCOS for July 2021 has been incorporated for the energy purchased by K-Electric from CPPA-G during July 2021. This has resulted in increase in total fuel cost by around Rs762 million.

The authority, during the hearing observed that prima facie, certain efficient power plants were not fully utilised and instead energy from inefficient sources was generated. The authority observed that both KGTPS and SGTPS were not operated by K-Electric to their full capacities, and also less energy was withdrawn from NTDC (National Grid) during consecutive hours for a number of days. Similarly, KCCPP was operated on HSD.

The authority carried out an in-house analysis of the data provided by K-Electric for the month of July, 2021, to work out the financial impact due to deviation from EMO. K-Electric was accordingly, asked the reasons for operation of its plant on HSD. K-Electric in this regard has submitted that due to shortage of gas and high demand there was no option available with K-Electric but to generate energy on HSD. The authority, in view thereof, has decided to treat the same as a fuel constraint, on the same lines as in the case of financial impact incurred due to non-availability of RLNG to power plants dispatched by NPCC. Therefore, for the instant month no cost is being deducted on this account. However, the authority, vide letter dated 16.09.2021, has directed K-Electric to finalise its gas supply agreement/ other arrangement to ensure gas availability at its SGTPS and KGTPS power plants and resolve the gas shortage/ less gas pressure issue within 30 days. In case, any future violations are observed on account of shortage of gas/ gas pressure, then the financial impact of the same will not be allowed to KE.

Regarding, lesser drawl from NTDC and simultaneous operation of BQPS-I on RFO, the issue was discussed with K-Electric; however, K-Electric has not provided any satisfactory evidence/ justification in the matter. Accordingly, the authority has decided not to allow the amount of Rs7.7 million incurred due to lesser drawl from NTDC, until satisfactory clarification/ evidence is submitted by K-Electric.