ISLAMABAD: National Electric Power Regulatory Authority (Nepra) has increased KE’s tariff by Rs 3 per unit under Fuel Charges Adjustment (FCA) mechanism to recover additional amount of Rs 6.105 billion for the month of July 2024.
KE’s in its FCA petition for September 2024 had requested Nepra to notify pending decisions of July and August 2024. The additional amount will be recovered in the bills of December 2024.
During the public hearing on August 29, 2024, KE had explained that the cost of electricity in KE system when compared with CPPA-G is higher due to the fact that KE does not have availability of nuclear or hydro based power plants in its fleet, nor does KE have sufficient supply of indigenous gas to operate its own plants. This increases KE generation cost as these technologies are the main reason for reduced cost in CPPA-G basket,
KE concerned at Nepra’s delay in announcing FCA for two months
However, KE itself is also actively working to rationalise its energy cost under which KE has issued 640MW of renewable RFPs out of which competitive bidding process for 150-MW Winder Bela solar projects has been concluded and the Bid Evaluation Report has been submitted with Nepra, while the competitive bidding process for remaining Projects is ongoing.
Further, KE has actively worked to enhance its Interconnection Capacity with National Grid to rationalise its generation cost and its Interconnecting Grids; i.e., KKI and Dhabeji are expected to be energised shortly. Dhabeji was energised a few days ago.
Additionally, KE is also working to off-take power from Jamshoro Coal Power project after its conversion to local coal. The Authority observed that the supply of power from IPPs having interconnection to NTDC network might not be possible due to technical and legal complications involving interconnection and execution of PPAs of these IPPs from NTDC/ CPPA-G to KE; hence, stance of the commentators is not valid.
Arif Bilwani, one of the commentators, inquired regarding operations of unit I and unit II of BQPS-I being the most inefficient with their tenure expired in August 2024 as per licence. KE in this regard submitted that it has requested Nepra to extend the useful lives of BQPS Unit 1 & 2 for 3 years till the new coal plant becomes operational expected by FY 2027.
Considering the contingency requirement for any unavailability of NTDC interconnection, any forced outage of generation fleet and IPPs and RLNG/ Gas shortfall due to reasons beyond KE’s control and pending regulatory and government approvals around the local coal plant, KE requests to retain Units 1 and 2 of BQPS-I. Further, generation on these units will help in avoiding the generation on HSD which is more expensive fuel than RLNG/ gas/ FO and the capacity cost of these units is very nominal.
According to determination, prior to FCA petition for May 2024, K-Electric, in its provisional FCA requests, has been claiming costs on account of part load adjustments, startup charges; etc., however, the Authority has been allowing FCA’s according to mechanisms allowed in the MYT for FY 2017 to FY 2023. From May 2024 onwards, K-Electric has been requesting fuel costs for its own power plants on the parameters allowed in its MYT for FY 2017-23.
In case, the Authority approves any revised parameters of K-Electric’s power plants under the new MYT; i.e., FY 2024 to FY 2030, the difference in cost if any, may be allowed in future adjustments, as part of previous adjustments, once the new MYT is notified.
Copyright Business Recorder, 2024
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