ISLAMABAD: A day after securing about Rs10.5 billion through Rs5.76 per unit adjustments for two months — May and June — K-Electric on Thursday sought another Rs3.1 per unit fuel cost adjustment for July to extract Rs6.2bn more from its consumers.

The National Electric Power Regulatory Authority (Nepra) has set Aug 29 for a public hearing at the request of KE. On Wednesday, the regulator allowed KE to charge additional fuel cost adjustments (FCA) of Rs2.59 and Rs3.168 per kWh for electricity consumed in May and June, respectively, to be charged to consumers in October and November.

Compared to KE’s request for Rs3.09 per unit additional FCA for July consumption, the Central Power Purchasing Agency (CPPA) has proposed about 32 paise per unit refund to consumers of ex-Wapda distribution companies (Discos) for July.

Utilities incur fuel charge adjustments due to global fuel price variations and generation mix changes. The higher FCAs apply to all consumer categories except lifeline power consumers, protected domestic consumers consuming up to 300 units, and agricultural consumers and electric vehicle charging stations (EVCS).

Regulator already allowed Rs5.76 per unit hike for May and June

The adjustment on account of monthly FCA is also applicable to domestic consumers who have Time-of-Use (ToU) meters, irrespective of their consumption level.

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

Published in Dawn, August 23rd, 2024