ISLAMABAD: The K-Electric has sought about Rs4.86 per unit additional charges under monthly fuel cost adjustment (FCA) and Rs4.52 per unit under quarterly tariff adjustments (QTA) to mop up about Rs27 billion in additional revenues in next month’s billing.

In its two separate petitions to the National Electric Power Regulatory Authority (Nepra), the Karachi-based power utility had sought Rs4.86 per unit FCA for electricity consumed in April with a revenue estimate of Rs9.353bn. It said the increase was on account of higher tariff of national grid and furnace oil cost for its own power generation.

The KE also sought a quarterly tariff adjustment (QTA) of Rs4.52 per unit on account of increase in weighted average cost of power purchases for January-March quarter with additional revenue impact of about Rs17.5bn.

As such, the total impact of both adjustments — FCA and QTA — would translate into Rs26.85bn, however, the FCA is instantly passed on to the consumers the following month while QTA becomes part of base tariff later.

Nepra has called a public hearing on June 14 to examine if KE’s request for fuel cost variation and quarterly variation were justified and if it had followed economic merit order while procuring electricity from national grid, its own power plants and other external sources. The regulator would also scrutinise whether existing charges applicable to different consumer categories should be revised or any change in mechanism was required for such charges based on actual maximum demand indicator (MDI) or sanction load.

Once approved, the K-Electric will be able to collect Rs9.35bn from its consumers in their monthly bill of July on account of FCA and Rs17.5bn would form part of national tariff with the clearance of the federal government based on tariff subsidies.

The KE claimed that major impact on the monthly FCA for April was due to an increase in the fuel price increase of furnace oil and national grid. The price of furnace oil in April increased by 22pc from March. The price of electricity from national grid also rose by 14pc to Rs10.66 in April from Rs9.387 in March.

Under the tariff mechanism, changes in fuel cost are passed on to consumers only on monthly basis through automatic mechanism.

Published in Dawn, June 8th, 2022