KE seeks another fuel cost adjustment

ISLAMABAD: As the National Electric Power Regulatory Authority (Nepra) on Monday notified Rs1.90 per unit additional cost to nationwide consumers for June, followed by 93 paise each in July and August, K-Electric piled up another fuel cost claim for April on top of its existing Rs18.6 per unit petition for the past nine months pending before the power regulator.

In its fresh request to Nepra, KE presented its claim for fuel price adjustment (FPA) for April based on three different considerations. Under two benchmarks, the FPA for KE consumers is to come down by 74 paise to Rs1.18 per unit, while in the third case, an additional FPA of 44 paise per unit is to be charged to consumers.

Nepra has called a customary public hearing on the subject later this month, although it has yet to conclude cases for the past nine months (July to March) and had concluded the public hearing on May 9.

In all these claims, including those already pending with the Nepra, the KE has sought FPA adjustment with a cumulative impact of Rs18.6 per unit or about Rs26bn on a “provisional basis” under three different options to clear a backlog and avoid a sudden increase in burden on its consumers.

Nepra notifies Rs1.90 per unit price hike for June

The KE is of the view that since its multi-year tariff (2024-30) was currently under regulator’s deliberation, it has filed FCAs based on three scenarios with the request for the approval of any one of the three scenarios and a guide recovery mechanism for these 10 months to facilitate timely cost recovery and avoid further accumulation of adjustments to be recovered from customers.

Under the first scenario, KE has proposed that the FCA be calculated as the difference between the actual fuel cost and the reference monthly fuel cost as per the interim tariff currently in place.

In the second option, KE has demanded that it be allowed to charge consumers the difference between the actual and reference monthly fuel cost as per the tariff petition filed by the power utility and currently under Nepra’s deliberation.

In the third case, KE has proposed that the difference between actual fuel costs versus annual weighted average fuel reference costs being considered as per the tariff petition filed by KE and currently under Nepra’s deliberation should be adopted.

The consumers of ex-distribution companies (Discos) have already paid an average of Rs2.89 per unit FCA for these months, the KE’s team said.

Separately, Nepra on Monday notified Rs1.90 per unit charge to consumers in June followed by 93 paise each in July and August under the quarterly tariff adjustment (QTA) to facilitate power companies mop up another Rs46.6bn from consumers.

These rates also apply to K-Electric consumers under the uniform tariff policy, but this cost doesn’t apply to consumers using fewer than 100 units per month and are in the protected lifeline category.

“The authority has decided to allow the instant positive quarterly adjustments of Rs46.613 billion pertaining to the third quarter of the FY2023-24, in a period of three months, i.e. June 2024 to August 2024, at the rate of Rs1.90/kWh, Rs0.93kWh and Rs0.93kWh for June, July and August 2024 respectively, to be applicable to all consumer categories, except lifeline consumers,” the regulator announced last week and formally notified it on Monday in the official gazette.

The notifications have been sent to all the Discos, including KE, for the application of Rs1.90 per unit additional cost in June and then 93 paise in July and August each.

Nepra has also completed the public hearing on the power divisions’ directive for about a 25pc increase in base national tariff, effective July 2024.

Published in Dawn, June 4th, 2024