Karachi’s leading power distributor says it is ready to reimburse consumers PKR 10.262/unit on account of lower international fuel prices.
By Naveed Naqvi
ISLAMABAD: The K-Electric has informed the National Electric Power Regulatory Authority (NEPRA) that it is ready to pay PKR 10.262/unit or cumulative PKR 12.08 billion back to power consumers in February 2023 bills on account of fuel charges adjustment (FCA) for December 2022.
The Karachi-based power facility has submitted its application to the power regulator, which would hold a public hearing on it on January 30, 2023, to ascertain if the requested fuel charges variation is justified and whether the company had followed the economic merit order (EMO) while giving dispatch to its power plants and power purchases from private power suppliers.
Interestingly, in its earlier decision for November’s FCA, Nepra decided to refund PKR 7.43 per unit to consumers in their January 2023 bills with a total impact of PKR 4.11 billion on the company.
If the regulator accepts the plea of K-Electric, then this adjustment or relief will be available to all user categories of KE except lifeline power consumers, domestic consumers consuming up to 300 units, and agricultural consumers and electric vehicle charging stations (EVCS).
This would be the sixth month in a row since July 2022 the regulator has instructed the K-Electric to reimburse consumers specific per-unit charges.
A spokesperson of the company said, “For the past consecutive months, fuels such as RLNG and Furnace Oil have seen a consistent decrease in the global market which is enabling KE to benefit its customer base. This is also possible due to the efficient and effective utilization of KE’s generation fleet to supply energy to Karachi.”
The FCA is incurred by utilities due to variations in international prices of imported fuel used to generate electricity. Furthermore, the consumers also get benefits when fuel prices decline as compared to the reference month.
“December’s FCA was lower primarily due to a reduction in the prices of RLNG, furnace oil, and power purchased from CPPA-G (Central Power Purchasing Agency-Guaranteed) by 17 percent, 15 percent, and 29 percent respectively as compared to September 2022,” he said.
On earlier occasions, the FCAs were refunded to consumers at the direction of the regulator. For October’s FCA, the Nepra had directed to refund PKR 2.456 per unit to consumers in their December bills. It had a total impact of PKR 4.11 billion on the company. FCA for September 2022 was a refund of PKR 5.126/unit to clients in their November bills with an impact of around PKR 9 billion.
For August’s FCA, the KE was directed to refund PKR 4.8862/unit to consumers in October bills having an impact of around PKR 8.5 billion. Likewise, for July 2022’s FCA, the regulator asked the KE to pay back PKR 4.117/unit in September 2022 bills.
While for June 2022’s FCA, the Nepra had allowed the utility to collect an additional PKR 11.102/unit in electricity bills for August and September 2022, with a combined impact of PKR 25 billion.
For May’s FCA too, the regulator had asked the KE to charge an extra PKR 9.518/unit over two months, including PKR 2.6322/unit in July and PKR 6.886/unit in August bills.
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