ISLAMABAD: National Electric Power Regulatory Authority (Nepra) is to approve an increase of Rs1.078 per unit in tariff of Karachi Electric (KE) for October 2021 under monthly Fuel Component Adjustment (FCA) mechanism.
This increase was assessed at a public hearing held at Nepra, presided over by Chairman Nepra, Tauseef H. Farooqi. Vice Chairman Nepra, Rafique Ahmad Shaikh, Member Balochistan, Engineer, Rehmatullah Baloch and Member KP, Maqsood Anwar Khan were also present.
KE, in its initial request had sought an increase of Paisa 29 per unit for October to recover Rs516 million from consumers due to variation in fuel prices. However, after determination of Discos FCA for October 2021, KE in its revised request has used the updated rate of energy purchased from CPPA-G, i.e., Rs9.9165 per unit as presented in Discos hearing instead of previous basket rate of Rs7.4052 per unit. On the basis of new basket rate, KE sought an increase of Rs 1.383 per unit for October 2021, total cost of which was Rs2.457 billion.
During the hearing, KE team, apprised that it sent out units were 1,777 Gwh, total cost of which was Rs26.009 billion at average rate of Rs14.63 per unit. Of this, its own sent out units were 758.14 Gwh; total price of which was Rs16.617 billion at a rate of Rs 21.91 per unit. The power utility purchased 1,019 Gwh of electricity from external sources, total price of which was Rs 9.391 billion @ of Rs 9.22 per unit.
Nepra’s tariff section team noted that it has deducted Rs 24 million on account of KCCPP, heat rate adjustment RLNG/ gas and HSD, respectively, whereas Rs20 million were allowed to the power utility which were already deducted. The impact of these deductions was Paisa 30.3 per unit. After deduction of this impact, the team determined a positive impact of Rs1.078 per unit.
KE has claimed that due to low pressure, KGTPS and SGTPS power plants could not generate energy as per their available capacities. Subsequently, the energy had to be generated through expensive/ inefficient plants which caused the indicative financial impact of Rs1.009 billion.
According to Nepra’s Monitoring & Enforcement (M&E) Wing, financial impact of underutilization of efficient energy sources/ simultaneous operation/ drawn from expensive sources was Rs 97.74 million. The M&E Wing proposed that the amount of Rs 97.74 million should be deducted from the claims of KE. The Authority; however, did not take any decision on the request of its M&E Wing, saying that the decision will be taken, if the power utility does not satisfy on this issue.
However, Chairman Nepra maintained that if KE is unable to settle its gas pressure issues with the SSGC, the regulator has no other option to deduct the amount used on expensive fuel as alternate to gas.
Aamir Ghaziani, CFO, KE briefed the Authority about the efforts made by the power utility to sort out gas pressure issue. He also requested Chairman Nepra to write a letter to the Ministry of Energy on this matter as it will be helpful for the power utility.
Chairman Nepra, who was apparently unhappy for not receiving proper replies to the regulator’s letters, agreed to write a letter on the request of KE and said, “unfortunately neither answer is received of letters from the government nor any action is taken”.
Anil Mumtaz and Arif Bilwani from Karachi raised questions on generation data, cost of generation and issues with SSGC and CPPA-G and other related issues.
Chairman Nepra said that he had given a generous offer to KE to hold a meeting with other stakeholders so that the power utility gas related issued are sorted out. However, the meeting has not been arranged despite passage of two and a half months due to which he was frustrated with the KE on this issue.
Copyright Business Recorder, 2021
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