Nepra raises power tariff for Karachi consumers by Rs11.10 for June on account of fuel cost adjustment

Published August 11, 2022
A technician from K-Electric fixes new electricity meters at a residential building in Karachi. — AFP/File
A technician from K-Electric fixes new electricity meters at a residential building in Karachi. — AFP/File

The National Electric Power Regulatory Authority (Nepra) on Thursday notified Rs11.10 per unit additional fuel cost adjustment (FCA) to K-Electric (KE) to be charged to consumers for the electricity they consumed in June.

The adjustment will be charged in the bills for August and September 2022, which will be applicable to all KE consumer categories except lifeline consumers.

In its brief, a copy of which is available with Dawn.com, the power regulator said: "As per the mechanism provided in the determination, impact of change in KE's own generation fuel cost component due to variation in fuel prices, generation mix and volume shall be passed on to the consumers directly in their monthly bills in the form of Fuel Charges Adjustment (FCA)."

Similarly, it went on, the impact of change in the fuel component of Power Purchase Price (PPP) due to variation in fuel prices and energy mix would also be passed on to consumers through monthly FCA.

"The Authority understands that burdening the consumer with FCA of June 2022 i.e. Rs. 11.1 023/kWh in August would not be in the interest of the consumers," Nepra said, noting that in the matter of XWDISCOs it had allowed Rs9.89 as FCA for the month of June to be recovered in the month of August.

"The authority has decided to charge Rs.3.0114/kWh, for the FCA of Jtme 2022 in billing month of August 2022. Whereas, the remaining i.e. Rs.8.0909/kWh shall be charged in the billing month of September," it added.

Nepra further instructed the authority to show separately in the bills on the basis of units charged to the consumers in the respective month to which the adjustment pertained.

Under the tariff mechanism, changes in fuel cost are passed on to consumers only on monthly basis through an automatic mechanism while quarterly tariff adjustments on account of variation in the power purchase price, capacity charges, variable operation and maintenance costs, use of system charges and including the impact of transmission and distribution losses are built in the base tariff by the federal government.

The hike in power tariff comes a day after the government notified Rs3.50 per unit increase in national base electricity tariff and promised to investigate complaints of overbilling on account of monthly FCAs in the current bills.

At a press conference yesterday, Power Minister Khurram Dastagir said the government was already examining how to minimise the impact of FCAs but hastened to add that the billing in August and September months would remain at the current level and start declining every month beginning November.

He conceded the power bills in July were exorbitant owing to increased consumption and relatively higher FCAs in May. Responding to a question, he agreed to investigate if higher units had also been built into the billing for FCAs or for lack of proper meter reading in April or May.

Dastagir added that the government had been waiting for end-June recoveries to be completed in July and now the performance of power distribution companies (Discos) would be examined and decisions to retain or change them would also be data-based.

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