ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has approved an increase of Rs 5.27 per unit in tariff of K-Electric (KE) for April 2022 under monthly Fuel Charge Adjustment (FCA) mechanism, having financial impact of Rs 10.157 billion.
To be recovered in bills of July 2022, FCA shall be applicable to all consumer categories except lifeline consumers. KE had sought an increase of Rs 5.307 per unit, having an impact of Rs 10.216 billion for April 2022.
The Authority held a public hearing on June 14, 2022 aimed at allowing general public and other stakeholders to seek clarifications from the regulator and power utility prior to reaching any final conclusion on tariff adjustment request.
The Authority noted that the Power Purchase Agreement (PPA) was signed between NTDCL and K-Electric on January 26, 2010 for five years for sale/ purchase of 650-MW on basket rates. Subsequently, a decision was made by the Council of Common Interest (CCI) in its meeting held on November 08, 2012 with respect to the modalities for withdrawal of electric power from NTDCL by the Petitioner, wherein it was decided to reduce the supply of energy by 300MW from NTDCL to K-Electric.
FCA mechanism: KE seeks record Rs11.33 per unit hike for May
However, the aforementioned decision of the CCI has been impugned by way of suits/ petitions by K-Electric in Sindh High Court. No new agreement has been signed between K-Electric and NTDCL till date and K-Electric is continuing to draw energy from the National Grid, which at present is around 1100 MW.
Regarding cost of energy purchased from CPPA-G during the current month, K-Electric has used the rate of Rs. 10.664/kWh; however, the Authority’s approved fuel cost component in the matter of XWDISCOs for the current month is Rs. 10.60 1/kWh.
In view thereof, while working out the instant FCA of K-Electric, rate approved by the Authority for XWDISCOS for the month under review has been incorporated for the energy purchased by K-Electric from CPPA-G during the month under review. This has resulted in decrease in total fuel cost by around Rs.47 million.
Regarding the financial impact due to underutilization of efficient plants on account of lower gas pressure, a letter was issued to KE on September 16, 2021, whereby, it was directed to resolve its gas pressure/ lower gas quantity issues within thirty (30) days.
In response, KE has revealed that it is in the process of resolving the lower gas pressure issue; however, there are certain meetings with stakeholders that will take place in due course of time. Subsequently, K-Electric has shared details of communication with SSGC and Ministry of Energy (Petroleum Division) regarding the finalization of GSA.
Copyright Business Recorder, 2022
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