FCA mechanism: KE’s tariff for June hiked by Rs11.10/unit

ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has increased tariff of the K-Electric (KE) by Rs11.10 per unit for June 2022 under monthly Fuel Charges Adjustment (FCA) mechanism, with the additional amounts to be charged in the billing months of August and September.

According to a statement released on Thursday, KE shall charge Rs3.0114 per kWh in the billing month of August 2022 whereas the remaining amount — ie Rs8.0909 per kWh — shall be charged in the billing month of September to recover an additional amount of Rs22 billion from consumers.

The power utility had sought an increase of Rs11.389 per unit to recover Rs22.254 billion from its consumers.

The decision to increase the tariff has been taken in the light of a public hearing held on July 28, 2022, data submitted by the utility, and NEPRA’s own analysis of different claims made by KE.

The authority had directed KE to provide details of net metering units purchased along with its FCA claim. In compliance the KE provided information regarding the net metering units purchased, along with the FCA request of June 2022.

As per the calculations made by KE, the utility suffered a loss of Rs37.45 million on account of net metering. The authority observed that KE is receiving excess net metering units which become part of its power purchase.

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Keeping in view that the quantum of net metering has reached a reasonable size and the power purchase cost of KE has increased exponentially as compared to the units purchased through net metering, NEPRA decided to include both the units purchased by KE through net metering along with its cost in the FCA, in the interest of the consumers.

KE made a net purchase of 0.98 GWh at a cost of Rs12.67 million and the same has been made part of the instant FCA decision.

In its request, the utility reported 198.244 GWh as units sent out and claimed an amount of Rs6.908 billion on account of operation of BQPS III based on RLNG invoices of PLL. The authority noted that the allowed fuel during testing and commissioning cater for pre-synched fuel cost and delta cost of pre-commissioning and commissioning tests for plant operating on lesser loads and/or simple cycle operation against combined cycle fuel cost on 100% load.

The authority noted that KE was supposed to repair the damaged high pressure heater of BQPS-1 (unit-1) when it got damaged in 2019. However, KE did not make any effort for the replacement of the part after 2019.

Further, the authority understands that repair of high pressure heater should have been carried out within the O&M cost allowed to KE vide the MYT.

The authority said that it understands that burdening the consumers with FCA of June 2022 — i.e. Rs11.1 023 per kWh in August — would not be in their interest. The authority has further noted that in the matter of Discos it allowed Rs9.8972 per kWh as FCA for the month of June 2022, to be recovered in the month of August 2022.

Keeping in view the situation, the authority decided to charge Rs3.0114 per kWh, for the FCA of June 2022 in billing month of August 2022. Whereas, the remaining amount, i.e. Rs8.0909 per kWh, shall be charged in the billing month of September 2022.

The impact of monthly FCA, which is not passed on to certain categories of consumers, would be accounted for in the quarterly adjustments. The FCA shall be applicable to all the consumer categories except lifeline consumers and shall be shown separately in the consumers’ bills on the basis of units billed to them in the respective month to which the adjustment pertains.

In the FCA decision for the month of May 2022, an amount of Rs6.8858 per kWh will be charged in the month of August 2022 which was inadvertently mentioned as Rs6.8860 per kWh in the decision of the FCA of KE for that month. Therefore, KE has been directed to charge Rs6.8858 per kWh for the FCA of May 2022 in the month of August 2022. The K-Electric shall show the fuel charges adjustment in respect of June 2022, in the billing months of August and September 2022.

Copyright Business Recorder, 2022