Nepra approves reduction in K-Electric tariff

Published January 7, 2015
— Reuters/file
— Reuters/file

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) reduced on Tuesday the K-Electric tariff by Rs1.64 per unit under monthly fuel adjustment for November.

It said the month when the new tariff would take effect would be announced through a notification.

It also notified lower K-Electric tariff for July, August and September.

Nepra held a public hearing presided over by its new Chairman Tariq Sadozai on K-Electric’s request for lower fuel price charges for November.

It was informed that consumers would be getting a relief of Rs2.25 billion for electricity generated in November. K-Electric sold 1.21bn units during the month at a lower fuel cost which saved it about Rs2.13bn.


Spokesman for the utility disputes regulator’s observations


Mr Tariq Sadozai, a former managing director of the KESC, and members of Punjab and Balochistan objected to K-Electric’s heavy reliance on power supplied by the National Transmission and Dispatch Company (NTDC) while keeping its own plants closed, causing loadshedding in Karachi and also across the country. They accused K-Electric of violating clause 2.1 of the agreement with the NTDC for obtaining 650MW from it without fully utilising its own units.

Nepra put on record in its notifications for previous months that it had been constrained by a series of stay orders granted by the Sindh High Court at the request of K-Electric against its various regulatory actions.

“Based on the analysis of the data as submitted by KESCL, the authority has noted with grave concern that KESCL is subjecting its consumers to undue and unauthorised loadshedding by continuously underutilising the available energy of its system (own + external),” the regulator said.

“Moreover it was also noted that KESCL is keeping its available generation capacity idle and relying more on the energy purchased from NTDC in violation of the terms of the power purchase agreement signed between the mentioned utilities. By doing so, KESCL is necessitating the operations of the most expensive power plants in NTDC system as well as aggravating the menace of loadshedding in the whole country,” Nepra said. It directed K-Electric to prudently utilise the available energy of its system and strictly comply with the terms of the aforementioned power purchase agreement to eliminate / reduce loadshedding in its territorial jurisdiction and in the whole country.

According to Nepra notification, the fuel price reduction of 13 paisa per unit for July would be passed on to consumers in February, 86 paisa for August in March and 20 paisa for September in April.

Consumers using less than 50 units per month will not get this benefit.

Meanwhile, K-Electric spokesman Ahmad Faraz said the company had not yet received Nepra’s approval of the tariff reduction.

Regarding concern over 650MW obtained from the NTDC without utilising its own resources, he said K-Electric did not agree to Nepra’s interpretation of clause 2.1 of the NTDC agreement. He said under the rules, K-Electric had to follow the economic merit order that envisaged utilisation of power from cheaper sources before that generated from expensive sources because this eventually benefited the consumer.

Mr Faraz said Nepra had been informed that the matter was sub judice and, therefore, it should be left to the court to decide.

He said NTDC’s 650MW accounted for 3-4 per cent of national grid’s power supply which could impact national loadshedding by 15 minutes.

He said K-electric was following a segmented approach for loadshedding under which low loss (less than 20pc) areas were totally exempted, while medium loss (20-30 pc) areas were now subjected to three hours of loadshedding, high loss (30-50pc) areas to four and a half hours and very high loss (50pc and above) areas to six hours.

Published in Dawn, January 7th, 2015

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