K-Electric assured NEPRA of its adherence to Economic Merit Order (EMO) protocols, submitting compliance reports regularly, with the latest report already filed
By our correspondent
KARACHI: The National Electric Power Regulatory Authority (NEPRA) has announced a rise in electricity rates for Karachi, increasing them by Rs0.40 per unit as part of the monthly adjustment for August 2024. This hike, confirmed by a recent notification, will be reflected in consumer bills issued by K-Electric in January 2025. This announcement comes on the heels of K-Electric’s request for a tariff reduction of Rs0.16 per unit due to fuel cost adjustments (FCA) for September 2024.
Tensions flared during a NEPRA hearing concerning K-Electric’s September FCA when a public representative raised concerns about perceived favoritism toward the utility. The speaker highlighted discrepancies between the fuel adjustment tariffs for K-Electric and those of the Central Power Purchasing Agency (CPPA-G), questioning the fairness of NEPRA’s recent approval of K-Electric’s generation tariff. Accusations of bias against NEPRA intensified, with claims that the regulatory process resembled a “fixed match,” benefiting the utility while placing an undue burden on consumers.
During the hearing, K-Electric officials explained that the adjustment was necessitated by a shift in their fuel mix. They reported a significant decrease in furnace oil usage, with reliance on RLNG increasing following the availability of the BQPS-3 unit. The generation from furnace oil dropped from 13 percent to 2 percent compared to the reference month. K-Electric assured NEPRA of its adherence to Economic Merit Order (EMO) protocols, submitting compliance reports regularly, with the latest report already filed. Officials noted that minor variations in dispatched units resulted from planned outages by CPPA-G.
Additionally, K-Electric reported a decline in power demand in Karachi, reflecting a national trend. However, they anticipate growth in demand driven by an improving economy and reduced borrowing costs. K-Electric compared its request for tariff relief with the Rs0.71 per unit relief granted to XWDISCOs, arguing that its FCA adjustments have generally been lower than those of the national grid in recent months.
NEPRA confirmed that K-Electric’s Multi-Year Tariff (MYT) petition for FY24-FY30 remains under review, with pricing based on data from March 2023. Concerns were also raised regarding fatal incidents within K-Electric’s service area during 2022-2023. NEPRA clarified that all cases undergo thorough investigations, ruling out negligence on K-Electric’s part in 32 incidents. While compensation has been mandated in cases where utilities are found liable, NEPRA’s authority does not extend to enforcement. Unlike other utilities that contested compensation orders in court, K-Electric complied with NEPRA’s directives.
