ISLAMABAD: Power Division (PD) is said to have proposed to Economic Coordination Committee (ECC) of the Cabinet to adjust pending tariff claims of Karachi Electric (KE) amounting to Rs 101 billion against its payables towards CPPA-G, well informed sources told Business Recorder.
Sharing the details, sources said, National Electric Power Regulatory Authority (Nepra) determined and recommended the Multiyear Tariff (MYT) on July 05, 2018 for Karachi Electric Limited (KEL) under Section 31(7) of “Regulation of Generation Transmission and Distribution of Electric Power Act, 1997 (the NEPRA Act) read with Rule 17 of the NEPRA (Tariff Standards and Procedure) Rules, 1998 (the Tariff Rules).
The tariff determined by the Nepra, was duly notified by the Federal Government on May 22, 2019. Further, quarterly tariff adjustments determined by Nepra on December 31, 2019 of eleven quarters, on the basis of last quarter April-June 2019, tariff was notified on October 12, 2020 to maintain uniform tariff in the country pursuant to ECC of the Cabinet decision of March 26, 2020.
The sources said, in Discos the difference, between actual cost of supplying power and reference rates, passed on to consumers prospectively through Fuel Cost Adjustment (FCA) and QTAs (Quarterly tariff adjustments) mechanism.
However, in the case of KE the reference rates (fuel and capacity) are rebased on quarterly basis through “mechanisms for adjustments as provided in MYT tariff determined by Nepra and accordingly the difference in actual and reference rates relates for previous period cannot be charged to consumers prospectively and hence to be paid through GoP subsidy, if required".
Copyright Business Recorder, 2021