KARACHI: National Electric Power Regulatory Authority (Nepra) has announced a public hearing on May 09, 2024 for the petition submitted by K-Electric on provisional monthly fuel charges adjustments (FCA) for the period July 2023 to March 2024.
As KE’s multi-year tariff is currently under Nepra’s deliberation, the utility has filed FCA based on three scenarios and has requested the approval of any one of the three scenarios for the authority’s consideration and guidance in determining the provisional FCA for above mentioned months to facilitate timely recovery of costs and avoid further accumulation of adjustments to be recovered from customers.
FCAs are incurred by utilities due to global variation in fuel prices used to generate electricity and change in the generation mix. These costs are passed through customers following Nepra’s scrutiny and approval. The request for FCA is due to utilisation of fuel sources based on economic merit order and changes in fuel prices.
Under the first scenario, KE has proposed that the FCA be calculated as the difference between actual fuel cost and the reference monthly fuel cost as per the interim tariff, whereas, as per the second scenario it has been suggested that the difference between the actual and reference monthly fuel cost be considered as per the tariff petition filed by KE and currently under Nepra’s deliberation. The third scenario proposes that the difference between actual fuel cost vs annual weighted average fuel reference costs being considered as per the tariff petition filed by KE and currently under Nepra’s deliberation.
Following the hearing, Nepra will issue a notification determining how the FCA will be calculated and instructions highlighting the method through which they will be applied on customer bills.
Copyright Business Recorder, 2024
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