Karachi consumers face Rs13.5bn burden as KE blocks power tariff relief

• Nepra discovers KE's additional Rs13.5bn expense recovery plan.
• Rs7.4bn already recovered by withholding relief, Rs6.1bn to follow.
• Power plant costs, efficiency losses passed on to consumers.

Karachi's electricity consumers are unlikely to get a relief of Rs4.84 per unit as K-Electric has emerged as a major obstacle, Geo News reported.

During a hearing on K-Electric’s request, the National Electric Power Regulatory Authority (Nepra) discovered that the power utility had introduced additional expenses amounting to Rs13.5 billion, which it intends to recover from consumers.

Under the fuel price adjustment (FPA) for January, KE consumers were supposed to receive a reduction of Rs4.84 per unit.

However, the hearing revealed that ever since monthly FPA adjustments started lowering electricity rates, KE has been bringing forward new expenses worth Rs13.5 billion under various cost categories.

It was disclosed that K-Electric has begun passing on costs related to power plant start-ups and efficiency losses to consumers. Of the total Rs13.5 billion, Rs7.4 billion has already been recovered from Karachi’s consumers by not providing the full relief, while the remaining Rs6.1 billion will be collected in phases.

Furthermore, K-Electric has now suggested that instead of passing on the full Rs4.84 per unit relief from January’s FPA, a portion of this amount should be adjusted against outstanding dues.

Nepra failed to justify why Karachi’s consumers should bear the burden of Rs13.5 billion. A Karachi resident questioned how K-Electric could pass on the costs of power plant start-ups and efficiency losses to consumers.

In response to another query regarding whether the NEPRA Act allows the transfer of an additional Rs13.5 billion to consumers, NEPRA officials said that the authority had exercised "wisdom" in its decision-making.