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ISLAMABAD: National Electric Power Regulatory Authority (Nepra) said on Wednesday that K-Electric’s exclusivity will end next year, after commentators from Karachi raised serious questions on power utility’s performance.

Nepra shared these views during a public hearing on KE’s FCA adjustment of Rs 5.275 per unit for March 2022 but indicated approval of Rs 4.83 per unit after making an adjustment of Re 0.43 per unit on account of CPPA-G as per proposed FCA for Discos and generation of BQPS-III. KE will recover Rs 7.870 billion in the bills of June 2022. The impact of mix variance was Rs 4.467 billion whereas impact of price variance was Rs 4.126 billion.

This increase will be adjusted against relief package of Rs 5 per unit announced by the previous government.

The Nepra authority comprised Chairman Tauseef H Farooqi, Vice Chairman Rafique Ahmad Shaikh and Member KP, Engineer Maqsood Anwar Khan who officiated the hearing, whereas Aamir Ghaziani, CFO KE and Ayaz Jaffar Ahmed, Director Finance KE represented the power utility.

During the hearing, a number of questions were raised by the commentators, Hafiz Naeemur Rehman of Jamaat-e-Islami, Arif Bilwani, Tanveer Barry and Aneel Mumtaz.

Hafiz Naeemur Rehman criticized Nepra’s legal team for not properly contesting cases against the power utility which has made the lives of Karachiites miserable. He suggested that the regulator should cancel the licence of KE due to its poor performance and if not then at least its monopoly should end from 2023.

KE seeks Rs5.27/unit raise for March

Chairman Nepra did not agree with the argument of cancelation of KE’s licence saying if the regular did that then what would be the next option. He, however, assured that Nepra will soon starting implementation on CTBCM, which would allow businessmen of Karachi to set up their own generation plants.

“Nepra has already given its viewpoint in writing and KE’s exclusivity will end next year,” said Chairman Nepra.

In reply to a question he said the regulator wanted that billions of rupees of claw-back be returned to consumers, and suggested that commentators should also come forward and become part of the proceedings of the court.

During the hearing it was also disclosed that KE had billed electricity generated from Bin Qasim Power Station-III (BQPS-III), which was in the testing phase at a rate of Rs 141 per unit.

KE team justified the FCA adjustment for March 2022 by stating that this was due to the use of furnace oil because supply of less gas was lower than demand.

Chairman Nepra opposed load-shedding on the basis of aggregate technical and commercial (AT&C) losses and asked the participants from Karachi to approach the court as a violation of human rights.

“If we are not hearing on the issue of AT&C based load-shedding then come forward so that we can contest the case jointly,” Chairman Nepra offered the representative of Jamaat-e-Islami.

Chairman Nepra said he would dispatch his team to Karachi to sit with the stakeholders on the issue of claw-back as it was unfair to the Karachiites, adding the amount should be refunded to the consumers.

One of the participants maintained that KE should rely more on electricity from national grid rather than its own expensive electricity. Chairman Nepra, however, did not agree with the logic saying that the power utility should be independent in generation but at the same time its prices must be lower. The country’s power generation scheme also came under discussion. There was a consensus that indigenous resource based generation is only feasible option which includes, hydel, solar, wind and local coal.

Tanveer Barry chairman Public Sector Utilities Power and Gas sub-committee said that KCCI had rejected the heavy increase in FCA, adding the business community had recorded its protest against it. He further lamented that Karachi was paying a heavy price for the inefficiently run plants and industry would not survive with expensive electricity relative to the rest of the world.

“We once again demand that inefficient power plants be shut down and a detailed detail audit of all power plants be conducted,” he said.

Within the territory of Karachi there are several new plants including a nuclear plant. One of them should be dedicated to Karachi so the city can get rid of the old inefficient plants, he added.

Only one percent of total generation is from renewable resources. If Pakistan cannot increase it to 100 percent then it should be at least 10-20 percent. KE cost per unit in February 2022 was 25.013/kwh which rose to Rs 28.088 in March/kwh compared to other power purchases of 12.831/kwh in February 2022 and 11.211/kwh in March 2022.

Regarding load-shedding Barry said that KE was shutting down feeders. AMR meters are installed on the transformers so they should shut down transformers instead of the feeders, so only those are punished, who are involved in electricity theft. Regarding GIDC arrears amounting to Rs 762 million per month billed by SSGC as per Supreme Court order of Nov 02, 2022 Barry said KCCI needed clarification from KE that after the stay order it got from the Sindh High Court would GIDC amount be added or not?

A KE Spokesperson said, “K-Electric in its petition for FCA requested for an increase of PKR 5.27 per unit on account of fuel consumption in the month of March 2022. The decision that will be taken after the hearing will be applicable on bills of only one month. Major impact is due to increase in the prices of Furnace Oil and RLNG which increased by 10% and 40% respectively against the reference month of December 2021. Also, 9% increase in the cost of power purchased from CPPA-G is observed. The variance in the cost of fuel and power purchased from CPPA-G is in accordance with the laws set by NEPRA, effects of which are passed to the consumers directly.”

Copyright Business Recorder, 2022


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