K-Electric seeks Rs7.04 per unit tariff reduction under November FCA

• Reduction is sought on account of fuel adjustment charges for Nov
• KE has sought tariff reduction for fifth consecutive month
• NEPRA to hold hearing on application on December 27 

K-Electric (KE) has submitted an application to the National Electric Power Regulatory Authority (NEPRA) expressing its willingness to reduce the power tariff of Rs 7.04/unit in January 2023 bills as part of the fuel charges adjustment (FCA) for November 2022.

The tariff drop will provide relief to the electricity consumers of Karachi at a time of soaring inflation and increasing cost of living.

NEPRA will conduct a public hearing on December 27 on KE's application for tariff reduction on account of fuel cost adjustment (FCA) for November 2022.

In the hearing, NEPRA would determine if the requested fuel charges variation is justified and whether the economic merit order (EMO) was followed while giving dispatch to its power plants and power purchases from private power suppliers.

This is the fifth consecutive petition for negative FCA filed since July where KE has sought a tariff reduction.

A KE spokesperson said, “November’s FCA was lower primarily due to a reduction in the prices of RLNG, furnace oil, and power purchased from CPPA-G [Central Power Purchasing Agency-Guaranteed] by 18%, 15%, and 37% respectively as compared to September 2022.”

NEPRA, after scrutiny and public hearings, allows or denies the FCAs, which are conducted independently for KE and state-owned entities (DISCOs).

Previous FCAs

NEPRA directed the K-Electric to refund Rs5.126/unit to clients regarding the FCA for September 2022, in the November bills. The tariff drop had an Rs9 billion impact on the company.

For August's FCA, KE was directed to refund Rs4.8862/unit to consumers in October bills having an impact of around Rs8.5 billion. Likewise, for July 2022's FCA, the regulator asked the KE to pay back Rs4.117/unit in September 2022 bills.

While for June 2022's FCA, NEPRA had allowed the utility to collect an additional Rs11.102/unit in electricity bills for August and September 2022, with a combined impact of Rs25 billion. For May's FCA too, it had asked the KE to charge an extra Rs9.518/unit in two months, including Rs2.6322/unit in July and Rs6.886/unit in August bills.