KARACHI: National Electric Power Regulatory Authority (NEPRA) has announced a public hearing on June 12, 2024, for the request submitted by K-Electric concerning provisional monthly fuel charges adjustments (FCA) for April 2024.

As KE's multi-year tariff is currently under deliberation by NEPRA, the utility has proposed FCA based on three scenarios and has requested the approval of any one of these scenarios for the authority's consideration and guidance in determining the provisional FCA for April 2024 to facilitate timely recovery of costs.

Fuel Charge Adjustment (FCA) is incurred by utilities due to global variations in fuel prices used to generate electricity and changes in the generation mix.

These costs are passed through to customers following NEPRA’s scrutiny and approval. The request for FCA is a result of the utilization of fuel sources based on economic merit order and changes in fuel prices.

Summary of the three cases is given below:

Interim Tariff Difference: KE has proposed that the FCA be calculated as the difference between the actual fuel cost and the reference monthly fuel cost as per the interim tariff, resulting in a reduction of Rs 1.18 per unit.

Ongoing Petition Adjustment: 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, resulting in an increase of Rs. 0.44 per unit.

Annual Cost Comparison: KE proposes that the difference between actual fuel cost and annual weighted average fuel reference costs be considered as per the tariff petition filed by KE and currently under NEPRA’s review, resulting in a reduction of Rs. 0.74 per unit.

Following the hearing, NEPRA will issue a notification determining how the FCA will be calculated and provide instructions on the method through which these adjustments will be applied to customer bills.

Copyright Business Recorder, 2024