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ISLAMABAD: Karachi Electric (KE) is to refund Rs 3.029 billion at the rate of Rs 2.59 per unit to its consumers except lifeline consumers for December 2021 as determined by NEPRA under monthly Fuel Adjustment (FCA) mechanism.

This understanding was reached between KE and National Electric Power Regulatory Authority at a public hearing, presided over by Chairman Nepra, Tauseef. H. Farooqi. Member Balochistan, Rehmatullah Baloch and Member KP, Maqsood Anwar Khan were also present.

KE, in its request, had sought negative adjustment of Rs 1.798 per unit for December 2021 to refund Rs 2.106 billion to the consumers as mix variance of negative adjustment of Rs 3.459 billion and positive variance of Rs 1.353 billion calculated on account of electricity purchased from CPPA-G.

KE’s team stated that RLNG prices have decreased by 13 per cent whereas furnace oil prices have increased by 12 per cent (December 21 verses September 21), respectively. Price of CPPA-G (provisional) increased by 31 per cent during this period.

However, after taking into account the basket price of FCA in December 2021 of Discos, Nepra further reduced KE FCA by Rs 913 million at the rate Rs 0.7795 per unit, negative adjustment of Rs5million electricity purchased from Tapal and Gul Ahmed and Rs 5 million as correction of RLNG rate. The total impact was calculated at Rs 923 million which was Rs 0.7881 per unit.

Nepra team worked out total negative impact of FCA at Rs 3.029 billion, which is Rs 2.5861 per unit, to be refunded to KE consumers in bills of December 2021.

During the hearing Chairman NEPRA sought an update on negotiations between KE and SSGCL on proposed longstanding Gas Supply Agreement (GSA).

Chief Financial Officer (CFO) KE, Aamir Ghaziani noted that negotiations with SSGCL on GSA were in progress but the latter has not given any assurance of full gas pressure.

KE has already shared SSGCL response with the regulator aimed at keeping it updated on negotiations.

After hearing from CFO KE that SSGCL has refused to give assurance of gas pressure. Chairman NEPRA asserted that if gas pressure will not be resolved then there is no need for a GSA with the gas utility.

Chairman NEPRA also enquired from CFO KE if the power utility is considering alternate options to meet gas requirements, to which KE responded in the affirmative, i.e., using tankers to transport RLNG to STGPS, KGTPS and KCCP plants.

He maintained that KE was also evaluating shifting two plants to another place like Port Qasim or any other location.

“Our team is working on different options to resolve gas supply and pressure issues to KE’s plants. If any proposal is firmed up, it will be shared with NEPRA,” Ghaziani maintained.

Tanveer Barry, Chairman power utility and gas Sub -Committee, said that under the clawback mechanism NEPRA ordered KE to pay Rs43.6 billion. KE got a stay order. Regarding wheeling policy case which is in court, NEPRA had imposed a fine of Rs 3 million on account of under utilisation of Bin Qasim power station.

“We don’t know how many cases are in court and what is their status? NEPRA should share the status of all cases or post it on its website,” he added.

Barry also sought details of status of 900MW RLNG-based Bin Qasim power plant because weather is changing and there will be increased demand of electricity. He also suggested shutting down inefficient power plants and a detailed technical audit of all power plants of KE.

He maintained that 7320MW Port Qasim coal plant, 7320MW Hub coal power plant, 7200 MW Hubco and 7700 MW KANUPP-2 are in the territory of Karachi which need to be dedicated for Karachi. He further stated that wheeling policy is not yet approved and the case is in court and queried how CTBCM can achieve its goal.

Responding to Barry, Chairman NEPRA said that the regulator is contesting the case in the court. He urged KCCI to become a party in the clawback case.

Copyright Business Recorder, 2022

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