K-Electric seeks nearly Rs19 per unit hike for seven months

K-Electric seeks nearly Rs19 per unit hike for seven months

KARACHI: The K-Electric is planning to shock consumers as the sole power utility in Karachi has sought the National Electric Power Regulatory Authority’s (Nepra) permission to charge Rs18.86 per unit additional fuel cost adjustment (FCA) from its consumers for the past seven months.

According to details, the KE requested provisional monthly fuel charge adjustments for the period from July 2023 to March 2024.

In its application, the power distribution company sought Rs18.86 per unit increase in the FCA for the past seven months and suggested Re0.29 decrease for the rest of the two months period.

If the power regulator approves the KE’s plea, the total increase would be Rs18.57 per unit.

Nepra has set May 9 as date for hearing the KE’s plea.

Last month, Nepra allowed power distribution companies and the KE to collect an additional Rs2.7492 per unit from power consumers on account of periodic adjustments for three consecutive months starting from April 2024.

The regulatory authority has authorised power companies to collect over Rs85.3 billion from power consumers as an adjustment for the second quarter (Oct-Dec 2023).

This Rs2.7 per unit adjustment will apply to K-Electric as well. Notably, the stated Rs85.275 billion does not encompass the collection from the Karachi-based utility.

If incorporated, the total amount may escalate to over Rs90 billion. It’s essential to highlight that consumers were burdened with multiple taxes on these additional charges, adding to their financial strain.

Specifically, the 18% Goods and Services Tax (GST) on this amount will further impose an additional burden of over Rs16 billion on power consumers. In a nutshell, the consumers will pay over Rs106 billion (or $380 million) in these three months.

It is to be noted on February 14, 2024, Nepra held a public hearing on the petition of these companies who had demanded Rs85 billion upward adjustments for the quarter under review.

This amount is to be collected on account of variation in capacity charges, variable operation and maintenance (O&M), additional recovery on incremental sales, use of system charges (UoSC), Market Operator Fee (MoF) and FCA impact on transmission and distribution (T&D) losses for the quarter.