ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved positive adjustment of Rs2.87 per unit for K-Electric for third quarter (Jan-March) 2023 under QTA mechanism.
According to determination, K-Electric requested an adjustment of positive Rs.5.170/kWh, for the quarter ending March 2023. The hearings were accordingly held on May 31, 2023.
K-Electric in its letter of October 18, 2022, requested NEPRA to allow cost of Insurance Premium of around Rs.9.727 billion, in light of the KE’s MYT determination of October 9, 2017 as a separate period cost in the next quarterly adjustment.
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The amount claimed by KE includes premium paid to Sinosure to provide coverage for Chinese component and to Euler Hermes for providing coverage for German component.
The Authority in order to arrive at a just and informed decision, and to provide a fair opportunity to KE to present its case, and all the relevant stakeholders involved, decided to conduct a hearing in the matter, which was held on May 03, 2023.
The Authority after considering the submissions of K-Electric, has decided to condone the delay in filing of the request by KE and has decided to allow the premium paid to Sinosure for coverage of the Chinese component and to Euler Hermes for providing coverage for the German component of financing.
The Authority has further decided not to allow the withholding tax being adjustable.
Accordingly, the Authority has decided to allow an amount of Rs.9.146 billion, to K-Electric, as cost of debt-insurance premium as a separate cost in the instant quarterly adjustment, ie, quarter ending March 2023.
The NEPRA decision says that Generation Licence of K-Electric, remanded to the Authority by the NEPRA Appellate Tribunal decided to accede to the request of K-Electric and allowed the actual/prudent cost relating to the interim operation of Unit-3 of BQPS-I (from May 01, 2021, to August 15, 2021).
Accordingly, the earlier decisions of the Authority (dated September 15, 2021 and May 12, 2022) in this regard, stand modified to this extent. In view thereof, the cost of operation of unit-3 of BQPS-I, which was earlier deducted by the Authority amounting to Rs. 1.425 billion for the period from June to August 2021, has been included in the quarterly adjustment i.e. quarter ended March 2023.
KE in light of the said order has requested the Authority in its letter of November 10, 2023, to include the earlier deducted amount of Rs.1.425 billion of BQPS-1, in the instant quarterly adjustment decision for the quarter Jan to Mar. 2023.
K-Electric requested its quarterly adjustment based on the projected units to be sold in the next quarter of 4,881 GWh. Now KE has provided its actual sent out units for the months of April — June 2023, which after adjusting for allowed losses works out as 4,458 GWh. Accordingly, the same have been used in the calculation of Quarterly Adjustment.
Based on the discussion, the Authority has determined positive adjustment of Rs 2.868 per unit for the quarter January-March 2023. According to KE’s spokesperson, Nepra issued its decision on the QTA for January to march 2023.
Copyright Business Recorder, 2024
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