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ISLAMABAD: Karachi Electric (KE) has sought an increase of Rs 3.40 per unit in its tariff for the month of January 2022 under monthly Fuel Charges Adjustment (FCA) mechanism.

The power utility intends to recover Rs3.727 billion from consumers on account of expensive electricity from its own power plants and purchased from IPPs and Central Power Purchasing Agency Guaranteed (CCP-A).

KE has also filed its quarterly adjustment request for the quarter October- December 2021, and according to the power utility has sought a negative adjustment of Paisa 30 per unit for the quarter.

National Electric Power Regulatory Authority (Nepra) is scheduled to hold a public hearing on March 1, 2022.

Nepra has framed following three issues, to be discussed during the hearing: (i) whether the requested fuel price variation is justified;(ii) whether the requested quarterly variation is justified; and (iii) whether K Electric has followed the merit order while giving dispatch to its power plants as well as power purchases from external resources.

Meanwhile, KE has submitted Tariff Differential Subsidy (TDS) claims of Rs 396.4 billion which includes FY 2021 actual and FY 2022 to FY 2023 estimates. Of this, Rs 66.3 billion are pending with Finance Division, Rs 101 billion pending with Power Division for ECC approval pertaining to the period July 2016 to June 2020(11+4 quarters), Rs 1.9 billion pending with Power Division-other items and Rs 76.7 billion net amount pending with Nepra pertaining to the period July 2020 to June 2021, expected to be determined in FY 2022. This implies outstanding receivables from GoP were Rs 245.9 billion as on June 30, 2021. After addition of Rs 150.5 billion as subsidy for FY 2022, the total cumulative amount has been estimated to be Rs 396.4 billion.

According to a letter written by CFO KE, Aamir Ghaziani, forecast claims are based on estimated units, fuel prices and generation/power purchase mix. Further, consumer tariff issued by GoP vide SRO 1429(l)/2021 of Nov 5,2021 has been considered. TDS includes impact of relief for zero rated industrial consumers and impact of Industrial Support Package (ISP) for incremental and peak consumption amountingto Rs 17 billion.

According to estimates for future period, prepared by the KE i.e. 2022-2023, total TDS will be Rs 128.3 billion, of which Rs 127.9 billion will be TDS while Re0.4 billion will be agriculture tube-sell subsidy (GoP) share.

“We urge the government that sufficient funds be allocated to clear KE’s outstanding TDS claims and to ensure smooth release of funds in future years, as timely release will be critical towards ensuring sustainability of KE’s business including obligations towards key fuel suppliers, lPPs and CPPA-G, as well as its ability to make the required investments in a timely manner,” said Ghaziani in his letter to Power Division.

Copyright Business Recorder, 2022

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