ISLAMABAD: Amid a fresh push for a Rs5.45 per unit additional fuel cost adjustment (FCA) for Karachiites in two months, the National Electric Power Regulatory Authority (Nepra) came under criticism from political and business circles of the country’s commercial and industrial capital on Tuesday.

At a public hearing, the Karachi-based private power utility, K-Electric, demanded an additional FCA of Rs2.53 per unit for electricity consumed in May and Rs2.92 per unit for June, with a cumulative financial impact of Rs10.036 billion in two months.

The power utility’s team, led by Chief Financial Officer Aamir Ghaziani, said the consumers of other ex-Wapda distribution companies had already been applied with Rs3.33 per unit additional FCA for May and Rs2.63 per unit for June with a total financial impact of Rs75bn.

This attracted widespread criticism from consumers, who accused the power regulator of acting as a rubber stamp by accepting the power division’s demand for base tariff increases and fuel cost adjustments by power companies.

Various business representatives from Karachi said they were also being charged Rs8.7 per unit combined FCAs for previous months, and the fresh adjustments would increase this additional cost beyond Rs10.8 per unit, potentially leading to unrest in the country’s largest city.

Some of them demanded that industries were being closed due to high energy costs, leading to unemployment. They demanded that K-Electric’s generation license should be cancelled and cheaper surplus supply from the National Transmission and Dispatch Company (NTDC) should be diverted to Karachi.

In April, Nepra fined the Karachi-based utility Rs50 million for technical-based load-shedding, but the situation remains unchanged. “It seems that the authority is supporting the company,” said Imran Shahid, a representative from Jamaat-i-Islami’s Karachi chapter. During recent downpours, over half of the power feeders tripped, reflecting the company’s poor state of affairs.

Mr Shahid expressed concern over allowing dollar-based returns to K-Electric, questioning its authenticity and warning of strong protests if true. He also accused Nepra of failing to protect consumers, allowing Rs70bn claims by K-Electric and not returning Rs54bn owed to consumers under a claw-back mechanism, which had been stayed through courts.

Nepra Chairman Waseem Mukhtar, who presided over the hearing, said all decisions of the regulator were available on its website and could be reviewed and challenged at appellate forums.

Representatives from the Korangi Association echoed concerns over the price hikes, highlighting severe heat and extended load-shedding in May and June. They warned that increased electricity bills could lead to public unrest, suggesting the collection be staggered over winter months.

The Nepra chairman defended the authority’s decisions, emphasising transparency and the collective decision-making process.

Published in Dawn, July 31st, 2024