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ISLAMABAD: Minister for Energy Hammad Azhar said on Thursday that the federal government has enhanced additional electricity supply to Karachi Electric (KE) by 200MW to meet the night-time demand of Karachi, in addition to the already available quota of 350MW.

He announced this in a tweet, the day after his meeting with Governor Sindh, Imran Ismail, Secretary Power, Secretary Finance and CEO KE.

The SAPM on Power and Petroleum, Tabish Gauhar was not invited to this "political meeting" as Prime Minister had tasked Governor Sindh to deal with KE, after his recent visit to Saudi Arabia.

The main issue between KE and the federal government is the payment mechanism of additional power which requires a new Power Purchase Agreement (PPA) expected to be signed in the next 10 to 15 days.

Presently, the government is supplying 1200MW to KE from the national grid (650MW+350+200MW). Power Division began supply of an additional 200MW electricity from Wednesday night after an agreement in principle on payment between the parties.

KE was facing a shortfall of up to 200MW from 12 midnight to 4am with demand peaking to around 3400-3500MW which has to be met. The power utility was requesting the federal government to supply an additional power of 200MW for two to three years until its newly established RLNG plant starts generation. The new plant will be functional in a month’s time.

Power Division maintained that first KE should sign a PPA then additional supply will be approved. However, KE argued that PPA has to be inked by both the sides. Power Division also asked KE to pay the price of additional electricity of 200MW in advance, which the power utility agreed to and now half of the amount is paid and the rest will be paid on Friday (today).

According to acting Managing Director, NTDC, Muhammad Ayub, presently 1100MW is being supplied to KE from national grid during the day-time.

The sources said KE had sought an additional electricity of 700MW from the national grid, after the federal government shelved its coal-fired power plant. However, the government did not entertain the power utility's request.

On May 21, 2021, the Economic Coordination Committee (ECC) of the Cabinet directed that (i) Power Purchase Agreement (PPA) for future be signed; (ii) agreement on payment of tariff differential subsidy (TDS) to be signed separately; and (iii) consequential actions may be completed by the Power Division by May 31, 2021 in order to ensure un-interrupted supply of electricity to Karachi.

The sources claim that the ECC also encouraged and endorsed the future plan of action as a result of successful negotiations with KE by the Minister for Energy, Minister PD&SI and Power Division.

Meanwhile, KE has sought adjustment (increase and decrease) in its tariff under monthly Fuel Charges Adjustments (FCAs) - own and power purchase from external sources from January-April 2021. For January, 2021, the power utility has sought an increase of Rs 1.978 per unit, February 2021 Rs 2.495 per unit, March Rs 1.497 per unit whereas a reduction of Paisa 87 per unit has been sought for April 2021.

KE has also filed its requests for quarterly adjustment for the quarter January-March 2021 in tariff on account of variation in Power Purchase Price (PPP) (other than fuel), and impact of T&D losses on fuel charges variation, as per the mechanism, provided in the MYT determination.

The power utility has sought an increase of Paisa 36 per unit in tariff for the period January-March 2021. Nepra is scheduled to hold a public hearing on KE's requests on FCA and quarterly adjustments.

Copyright Business Recorder, 2021

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