ISLAMABAD (our reporter):- The National Electric Power Regulatory Authority (NEPRA) to conduct a public hearing on February 28th over the petition submitted by K-Electric on account of Fuel Charges Adjustments (FCA) for January 2023 and Quarterly Adjustments for October to December 2022.
For the month of January, K-Electric has filed a petition for the positive FCA at a rate of PKR 2.69/kWh. Per prevailing laws and regulations, these are one-time charges which are expected to apply on only one monthly bill. On the other hand, KE has also requested a reduction of PKR.7.366 / kWh rupees on account of Quarterly Adjustments. The impact of quarterly adjustments is usually not passed to consumers under the uniform tariff policy applicable across the country. However, the final decision rests with the Federal Ministry of Energy, Government of Pakistan, and the NEPRA Authority.
Fuel Charge Adjustments (FCA) are incurred by utilities due to global variation in fuel prices used to generate electricity and change in the generation mix. Under the policies governing the power sector, these costs are passed through to the customers following NEPRA’s scrutiny and approval. Consumers also receive a benefit when the cost of fuel decreases.
The positive FCA for January 2023 is primarily due to an increase in price of power purchased from CPPA-G. The price of power purchased from CPPA-G in January 2023 has increased by 67% from December 2022.
As per KE spokesperson, FCAs are approved by the regulator, NEPRA, after conducting scrutiny and public hearing, which are conducted independently for KE and state-owned entities (XWDISCOs). The authority also specifies the month during which the charge is applied in consumer bills. This FCA petition is in line with the mechanism given in KE’s Multi Year Tariff whereby changes in fuel prices, generation and power purchase mix are passed through.
K-Electric (KE) is a public listed company incorporated in Pakistan in 1913 as KESC. Privatized in 2005 KE is the only vertically integrated utility in Pakistan supplying electricity within a 6500 square kilometers territory including Karachi and its adjoining areas. The majority shares (66.4%) of the company are listed in the PSX owned by KES Power, a consortium of investors including Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding), Kuwait, and the Infrastructure and Growth Capital Fund (IGCF). The Government of Pakistan is also a minority shareholder (24.36%) in the company.