KE allowed Rs1.08 per unit additional fuel cost for October

Published December 3, 2021
A photo of an electricity technician working on electricity meters. — AFP/File
A photo of an electricity technician working on electricity meters. — AFP/File

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Thursday allowed K-Electric (KE) to charge about Rs1.08 per unit additional fuel cost on account of electricity consumed in October.

The Nepra hearing – presided over by its Chairman Tauseef H. Farooqui – held a public hearing on KE’s petition on Fuel Charges Adjustments (FCA) for the month of October seeking an increase of Rs1.38 per unit.

Originally, KE had filed the FCA request for 29 paisa per unit increase on November 12 to generate Rs516 million additional funds from its consumers. The utility reported that its request was based on the Central Power Purchase Agency (CPPA)’s rate fuel cost of September i.e. Rs7.4052 per unit which was the latest available rate at the time of filing of petition.

Utility told to resolve gas supply issues

However, during the hearing, KE requested to increase the demanded FCA to Rs1.38 per unit instead of 29 paisa per unit. The impact of the increase was estimated at Rs2.46bn on KE consumers.

Citing the reason for increased FCA, KE has taken the plea that the regulator had conducted a public hearing for CPPA request for additional FCA to ex-Wapda distribution companies (Discos) for October on November 30 during which the rate presented (for October 2021) was Rs9.9165 per unit.

Considering significant difference in both rates and its impact on KE’s FCA, the company’s revised its request to Rs1.38 per unit. The Nepra tentatively finalised additional FCA at Rs1.08 but said certain documents and data were subject to verification and would be confirmed through a written determination.

A KE official explained that this increase was mainly due to a surge in prices of furnace oil, regasified liquefied natural gas and CPPA prices by seven per cent, 5pc and 31pc, respectively. Considering significant variation in CPPA rate and its impact on KE’s fuel cost, the utility has submitted revised monthly cost variation for the month of October.

The regulator’s case officers said that after various adjustments, the increase under monthly FCA will be around Rs1.08 per unit. The increase will have a financial impact of Rs1.9bn, he said.

Published in Dawn, December 3rd, 2021

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