In Islamabad, consumers of K-Electric may soon face an increase in electricity rates due to a quarterly tariff adjustment.
The National Electric Power Regulatory Authority (Nepra) has not yet made a decision on K-Electric’s request for a tariff hike of Rs3.217 per unit for the April-June 2023 period, citing quarterly adjustments. KE’s request includes an additional quarterly adjustment of Rs3.02 per unit, accounting for revisions in price settings during that period and an annual inflationary impact of Rs0.87 per unit on operations and maintenance (O&M) expenses, in addition to already covered expenses in the base tariff and previous adjustments. KE also sought a write-off of Rs13.2 billion for unrecovered bills for the quarter, which was later revised to Rs16.254 billion for the 2022-23 financial year.
According to KE, various factors contributed to these adjustments, including variations in O&M and capacity costs of power purchases, unrecovered costs of fuel charges adjustment (FCA) due to non-adjustment of transmission and distribution losses, lifeline, 300 units, and agricultural units. Furthermore, additional write-offs were requested.
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Nepra’s calculations indicate negative adjustments in certain areas, including O&M and capacity costs of power purchases. The regulator is considering whether the write-off can be allowed for the April-June quarter.
It is important to note that Nepra had already permitted a Rs3.28 per unit rate increase for KE consumers in the previous month as part of a uniform national tariff increase due to quarterly adjustments. This increase applies nationwide for six months (October 2023 to March 2024).
Furthermore, Nepra recently concluded a public hearing on KE’s power acquisition program (PAP) for FY24 to FY30. The program aims to develop a long-term capacity expansion plan to meet energy demand in a reliable and sustainable manner, emphasizing the gradual integration of renewable and indigenous power sources.
In a separate development, the Central Power Purchasing Agency-Guarantee (CPPA-G) has submitted an application to Nepra seeking a tariff increase of Rs0.5471 per kilowatt-hour (kWh) on behalf of power distribution companies (DISCOs), excluding KE. This application pertains to a tariff increase request for September 2023 and will be reviewed by Nepra in a hearing scheduled for November 1, 2023. The application is based on power generation costs and various fuel sources used in September.
