KARACHI, March 17: The Karachi Electric Supply Corporation has sought a 15 per cent increase in power tariff, effective from February, to offset the impact of the increase in natural gas prices brought about by the change in the billing mechanism of the Sui Southern Gas Company.

Well-placed sources told Dawn on Sunday that the change in the SSGC billing mechanism had increased the gas bill of the KESC’s Bin Qasim power plant, which produced 78.44 per cent of the total electricity generated by the power utility, by nearly 10 per cent.

They added that the power utility had filed a petition with the National Electric Power Regulatory Authority (Nepra), asking for the 15 per cent increase in power tariff with effect from February. They added that the KESC had also sought another 15 per cent increase in power tariff from Oct 2002 followed by an 11 per cent increase in electricity tariff from Feb 2003.

They added that Nepra was considering the KESC petition and would announce the decision next week.

Under the new SSGC billing mechanism those consumers who are getting natural gas whose heating value is more than 950 British Thermal Units pay more than what they were paying previously.

By the same token, those consumers who are getting natural gas whose heating value is less than 950 British Thermal Units pay less than what they were paying previously.

SSGC sources said that since March 2000 the company had been receiving gas from the Zamzama field whose heating value — which was also referred to as calorific value in technical parlance — was less than the heating value of gas from the Sui field. As a result, the average heating value of the gas mix had come down in a big way, necessitating a change in the billing mechanism.

According to an SSGC presentation report, the calorific value of the Zamzama gas field is 808 British Thermal Units, and that of the Sui gas field is 984 British Thermal Units.

KESC officials said that previously the difference between fuel oil prices and natural gas prices had been more than 33 per cent.

“Because of the gradual increase in natural gas prices and the change in the SSGC billing mechanism, the difference had come down to 11 per cent.”

During June 2001 and July 2000, the KESC purchased natural gas worth 4.Rs9 billion from the SSGC.

The sources said the SSGC had earned an additional sum of Rs20 million in January because it had sold natural gas based on its heating value and not on its volume.

They said that the SSGC had sold 258 million cubic metres of natural gas in January. In terms of its heating value, the gas company had sold 8.96 million Million British Thermal Unit natural gas in January.

“If the gas company had sold this amount of gas in terms of volume — as it used to up until Dec 2001 — it would have earned Rs1.29 billion. Due to the change in the billing mechanism — enforced by the government effective from Jan 1 — the SSGC earned Rs1.31 billion.”