August FCA: Nepra approves over 40 paisas provisional positive adjustment for KE

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has approved provisional positive adjustment of paisa 40.13 per unit for K-Electric to recover additional amount of Rs 674 million from consumers for August 2024.

The regulator conducted a public hearing on October 3, 2024 during which the representatives of power utility company gave argument in favour of proposed FCA adjustment of paisa 51 per unit to recover additional amount of Rs 853 million from its consumers.

In response, KE stated that cost of electricity in KE’s own generation is costlier as it does not have nuclear or hydro power plants and an insufficient supply to find indigenous gas for its generation fleet.

KE concerned at Nepra’s delay in announcing FCA for two months

KE also submitted that to reduce its generation cost, KE has issued 640 MW of Renewable RFPs out of which Competitive Bidding Process for 150MW Winder Bela Solar Projects and 220 MW Site Neutral Hybrid (Wind & Solar) Project have been concluded and the bid evaluation reports have been submitted to NEPRA while competitive bidding process for remaining projects is in process. In addition to the aforementioned, interconnection of 500 kV KKI grid and 220 kV Dhabeji grid with National Grid is in finalization stages and expected to be commissioned within this year. Additionally, KE plans to off take power from Jamshoro Coal Power project after its conversion to local coal.

On the issue of gas dispute with SSGC, KEargued outstanding amounts by SSGC represent principal dues of more than 10 years and markup amount which is disputed by KE as the delay in payments in the past is due to delay in receipt from government entities and on net-principal basis, KE was in a receivable position.

This dispute is currently under consideration in mediation as per the Mediation Agreement between KE and Government parties including SSGC to resolve this dispute.

However, current gas bills are being paid to SSGC. Further, the GSA between KE and SSGC is under process and despite KE’s repeated requests, the GSA remains unexecuted due to the fact that SSGC is not willing to confirm quantity.

The representative of Karachi Chamber of Commerce and Industry (KCCI) Tanveer Barry said that tariff of KE of around Rs.44/kWh as compared to Discos based tariff of Rs.34/kWh and low fuel cost of CPPA-G as compared to KE.

While responding to the query, KE submitted that the cost of electricity in KE system when compared with CPPA-G is higher because unlike CPPA-G, KE does not have availability of nuclear or hydro based power plants in its fleet, nor does KE is provided sufficientsupply of indigenous/low Btu gas to operate its own plants.

The adjustment shall be applicable to all the consumer categories except Electric Vehicle Charging Stations (EVCS), lifeline consumers and prepaid metering consumers. K-Electric shall reflect the fuel charges adjustment in respect of August 2024 in the billing month of January 2025.

Copyright Business Recorder, 2024