ISLAMABAD: K-Electric (KE) has reached an agreement with the federal government for an almost 100 per cent boost in supply from the national grid, the power utility said on Thursday.

The announcement comes amid stiff opposition from Karachi-based business leaders who have objected to KE’s push for a higher quarterly tariff. They have also raised concerns over KE’s six-year power acquisition plan, which forecasts an addition of 2,050 megawatts, predominantly from local coal and renewable sources.

The National Electric Power Regulatory Authority (Nepra) conducted two public hearings on Thursday and reserved its judgement. However, it hinted at not allowing a Rs16 billion write-off claimed by K-Electric, as had been the precedent in the past, practically ruling out any additional quarterly tariff adjustment.

K-Electric had sought Rs3.02 per unit additional fuel cost adjustment for the April-June quarter, mainly based on Rs16bn deemed unrecoverable.

The KE’s representatives disclosed during the hearing that it had “initialled the revised interconnection agreement (ICA) and Power Procurement Agency Agreement (PPAA) with National Transmission and Despatch Company (NTDC) and Central Power Purchasing Agency (CPPA), respectively, for the procurement of additional power up to the transmission capacity from the national grid for 10 years”.

The agreements had been reached following the creation of a special committee comprising the representatives of the federal ministries, KE and federal government entities, including the NTDC and the CPPA, to resolve outstanding issues, including hundreds of billions of rupees worth of claims and counterclaims.

Nepra was told that the ICA and PPAA were now expected to be submitted to the relevant forums like the Cabinet Committee on Energy (CCoE) and the Economic Coordination Committee (ECC) of the cabinet for approval.

Arif Bilwani, a leading businessman from Karachi, critiqued the terms that make it impossible for consumers to default and questioned the justification of the Rs16bn write-off. Another businessman, Tanveer Bari, pointed out the current average tariff burden on Karachi consumers, amounting to Rs55 per unit.

KE said its 2024-30 power acquisition plan outlines a vision for sustainable energy growth in Karachi, emphasising the incorporation of renewable and indigenous resources. It said the six-year plan complemented the company’s Rs484bn investment plan to bolster transmission and distribution infrastructure.

With an annual growth rate of 2pc, Karachi’s peak energy demand might hit 5,000 MW by 2030, serving an estimated 5 million users, it said.

Published in Dawn, October 20th, 2023