KARACHI: K-Electric consumers and shareholders have asked the National Electric Power Regulatory Authority (Nepra) if the purpose of its creation was to just approve tariff increase requests.

That was the bottom line at a public hearing called to look into the matter of monthly fuel charges adjustment request of K-Electric Limited for Dec 2015, Jan 2016 and quarterly adjustment request for Oct to Dec, 2015 at a hotel here on Thursday.

From Nepra, retired major Haroon Rashid, deputy chairman, and Syed Masood ul Hasan Naqvi, member from Sindh, heard out the KE’s case and what the people had to say about it.

KE director finance Aamir Ghaziani submitted a request for an increase of Rs1.9 for the Oct to Dec 2015 quarter, plus a 71-paisa increase for Dec. There was another item, too, an increase of 15paisa in tariff due to excessive labour but it was adjourned because KE labour union chairman Ikhlaq Ahmed Khan also wanted to be made a party to the case. He was asked by the Nepra officials to submit his viewpoint after which a new date would be given for the hearing to discuss that issue.

About the other increases Tanveer Ahmed Barry, chairman, public sector utilities, power & gas sub-committee, Karachi Chamber of Commerce & Industry, and Dr Qazi Kamal spoke up besides industrialist Arif Bilwani and Abubaker Usman of Pasban’s public issues committee.

The gathering was informed that the KE was producing furnace oil based power at only 2pc of its capacity. It was pointed out that the KE’s purchases were very low. “In fact the economics, whether they produce power or buy it, are the same as KE is purchasing power at nearly the same rate as they produce it themselves unless the seller does not want to sell for bad credit reasons.” It was also said that the levels of loadshedding could have been reduced and lowered if the KE had purchased the right quantities of power at the right time and made payments to the independent power producers.

When approving monthly adjustments in tariff, Nepra was asked to ensure that the KE had dispatched units in the economic merit order.

It was termed “disturbing” to see that there were plants in the KE that had an auxiliary consumption level higher than 6.1pc. The public representatives requested Nepra to carry out an audit to find out why it was so. “Although we understand that the financial impact is not carried out to the end user, the question remains, is this not a waste and if so why is it being allowed and not being reduced resulting in even more fuel consumption?” a man said.

The figures presented showed that 22,289 tonnes of fuel was consumed in Jan, 2016. The total furnace oil production was said to be a mere 107MW or 77MKWH, which one shareholder thought was “mind-boggling”.

The claimed figure by the KE is 0.34 maximum for conversion per kg of fuel to MKWH. “So this means that 220kg is used for 1MKWHr or 0.22 for 1KWHr. Has the efficiency level of KE plants improved or the conversion factors cited are outdated?” asked another consumer.

It was also suggested that the KE not be allowed increase in tariff on account of fuel price variation till approval of heat rate, which applies to all its new and upcoming units. A very charged consumer at the hearing said: “KE is working with very high heat rates. There are instances of five-figure amounts in working. How can Nepra allow this? Because it means that Nepra is allowing an inefficient plant to run and is thereby contradicting its own rules or it does not have the necessary enforcement strength or the required legal backing and support to face this in court. Either way, Nepra is failing miserably as all it seems to be doing is grant tariff increases. Was this the reason why Nepra was created?”

Published in Dawn, March 18th, 2016