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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) on Friday approved adjustments in tariff of Karachi Electric (KE) for seven months of fuel cost component (from June 2020 to December 2020) of which increase for four months and decrease for three months have been allowed to the power utility. Nepra had held a public hearing on February 23, 2021 but did not release determinations for more than three months as it usually does in cases of power Distribution Companies (Discos).

The cumulative financial impact of adjustments of seven months has been calculated at Rs 1 billion. The power utility has already paid this amount to the SSGC and oil companies through borrowing from the commercial banks.

The decision says that the Authority has approved a decrease of Paisa 74.78 per unit for June, increase of Paisa 72.56 per unit for July 2020, increase of Paisa 30.78 per unit for August, increase of Paisa 71.01 per unit for September, decrease of Paisa 0.288 per unit for October, increase of Rs 1.1017 per unit for November and increase of Paisa 49.87 per unit for December 2020.

The adjustments of June, July and August 2020 will be passed on to consumers in their June 2021 bills whereas adjustments of September, October, November and December, 2020 will be charged in the bills of July 2021.

The applicability of the approved FCAs would be applicable to all the consumer categories except lifeline consumers and would be shown separately in the consumers’ bills on the basis of units billed to the consumers in the respective month to which the adjustment pertains.

Similarly, negative FCAs would be applicable to all the consumer categories except lifeline consumers, domestic consumers consuming up-to 300 units and agriculture consumers of K-Electric.

The negative adjustment on account of monthly FCA is also applicable to the domestic consumers having Time of Use (ToU) meters irrespective of their consumption level.

Further industrial consumers availing ISP will not get the benefit of negative FCA on incremental sales only. They will, however, get the benefit of negative FCA on base tariff billed units.

Nepra, in its determination observed that as per clause 6, billing and payments, sub clause 6.01 of the PPA executed by K-Electric with KANUPP, for the energy supplied/purchased by KANEJPP of KESC, as the case may be, bills shall be raised separately, but payment shall be made on net output basis. K-Electric, however, in its adjustment claims has included cost of energy purchased from KANUPP on gross basis, i.e., without netting it for the energy exported to KANUPP. The Authority, therefore, in line with clause 6.01 of the Agreement, has adjusted the energy as well as cost of KANUPP on net output basis.

The Authority observed that K-Electric while calculating the fuel cost of around Rs 4,634 million of Gul Ahmed Energy Ltd. (GAEL) for the period from June to December 2020, used reference CV of 38,826.1 BTUs/Kg. The Authority, however, noted that as per the decision dated 03.06.2020, in the matter of review motion filed by GAEL, it has been allowed reference LHV Calorific Value of 38,584.49 BTtJs/Kg and revised LHV calorific value as per actual, subject to minimum of 17,333 BTUs/lb (38,212.74 BTUsIKg). Based on the allowed CV as per the decision dated 03.06.2020, the total fuel cost of GAEL for the period from June to December 2020, works out at around Rs.4,605 million instead of Rs 4,634 million, claimed by K-Electric. Accordingly, difference of around Rs 29 million has been adjusted from the cost of GAEL.

The Authority, in its determination of February 10, 2017 in the matter of tariff determination of STDC for 132 kV transmission line project, decided to cap the loss threshold for STDC at 1%. Subsequently, the Authority while deciding the Review Motion of STDC of June 14, 2018, allowed a maximum of 1.5% transmission losses provisionally for the period of six months from COD. The CoD was achieved by the plants in January 2018, thus, maximum of 1.5% transmission losses to STDC was allowed only from January to June 2018. Afterwards, the Authority, in its decision of January 09, 2020, allowed a transmission loss level with a cap of 2% to STDC, from the date of the decision i.e. January 09, 2020 onward. Accordingly, for the period from January 09, 2020 onward, including the current period under consideration, STDC losses with a cap of 2% have been considered while working out the instant tariff adjustments of K-Electric.

Copyright Business Recorder, 2021

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