ISLAMABAD: K-Electric has sought Nepra’s provisional approval to impose Fuel Charges Adjustment (FCA) at the rate of Rs 3.09 per unit on its consumers to recover additional amount of Rs 6.206 billion in July, 2024 mainly due to 47.5 percent higher cost of fuel owing to 73 percent higher generation cost.
The Regulator is scheduled to hold a public hearing on August 29, 2024 for public scrutiny of KE’s data on fuel price variation in July 2024, which became foundation for imposing FCA of Rs 3.09 per unit.
According to KE for the calculation of FCA of July 2024, CPPA’s fuel cost for July 2024 is based on CPPA-G’s requested rate for July 2024 and subject to actualization based on NEPRA’s decision. Monthly Fuel Cost Adjustment for July 2024 has been calculated based on March 2023 as the interim tariff reference for consideration of the Authority.
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The KE claims that it dispatches as per Economic Merit Order (EMO) from its own generating units (with the available fuel resources) and import from external sources. It is also certified that the cost of fuel and power purchase claim does not include any late payment surcharge/mark-up/interest.
The data shared with Nepra, shows that KE’s reference was based on sent out cost of 1,478 GWh at Rs 15.99 per unit projected on the KE’s own cost of fuel, Rs 13.504 billion and cost of fuel of external purchases at Rs10.135 billion, totaling Rs 23.638 billion.
However, actual data was different from the reference, which has substantial financial impact on the consumers’ pockets.
Actual data indicates that cost per unit sent out was Rs 19.08 per unit in July 2024 as total cost of fuel was Rs 14.730 billion higher than reference cost due to only KEs’ own fuel cost.
The data shows that the KE’s own fuel cost was Rs 28.449 billion in July 2024 against projected cost of Rs 13.504 billion. However, cost of fuel of power purchase from external sources was Rs 9.919 billion against reference of 10.135 billion, showing a decrease of Rs 0.216 billion. Total cost of fuel was of Rs 38.368 billion against projection of Rs 23.638 billion. The KE’s sent out units were 2,011 GWh against reference sent out units of 1,478 GWh which was 73.5 per unit higher than the projections due to hot summer in Karachi.
The sent out cost was calculated at Rs 19.08 per unit in July as compared to reference of Rs 15.99 per unit, showing variation of Rs 3.09 unit, cumulative cost of which was Rs 6.206 billion. The FCA adjustment of July is likely to be recovered in the bills of December 2024.
Copyright Business Recorder, 2024