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ISLAMABAD/KARACHI: K-Electric (KE) has sought unprecedented hike of Rs 11.33 per unit in its tariff to pass on additional financial burden of Rs 22.65 billion to the consumers for May under the monthly Fuel Charges Adjustment (FCA) mechanism. The National Electric Power Regulatory Authority (Nepra) is scheduled to hold a public hearing on FCA adjustment request of KE on July 4, 2022.

KE’s Director Finance, Ayaz Jaffar Ahmed, in his letter to Registrar Nepra, said that calculation for May 2022 is based on CPPA-G’s requested rate for the month of May 2022 and it is subject to adjustment based on determination for May 2022 to be issued by Nepra.

Moreover, installment of GIDC arrears amounting to Rs 2.425 billion per month is being billed by the SSGC as per Supreme Court order dated November 02, 2020. However, Nepra in its FCA decision for the month of June 2021 stated “considering the fact that K-Electric has obtained stay order from the SHC in the matter, (it has been) decided not to allow any amount on account of GIDC till final decision by the SHC in the matter”. Accordingly, GIDC for the month of May 2022 will be claimed as per the final decision of Honorable SHC in the matter.

According to Ahmed, KE dispatches are as per Economic Merit Order (EMO) from its own generating units (with the available fuel resources) and import from external sources.

He has certified that the cost of fuel and power purchase claim does not include any amount of late payment surcharge/mark-up/interest.

FCA for May 22: CPPA-G wants Rs8/unit tariff raise for Discos

With respect to KE FCA adjustment request Nepra directed that in the Multi Year Tariff, (given Nepra determined provisional heat rates for KE’s generating plants) KE conducts fresh heat rate test for its plants, based on which final Heat rates will be determined by Nepra.

In this regard, the regulator has issued its decision on heat rate for BQP—II plant on January 1, 2020 and accordingly the calculations are based on heat rates determined therein.

With respect to heat rate of KGTPS and KCCP, Nepra issued its determination on January 18, 2021 against which KE filed review motion. Nepra issued its decision on the review motion on November 05, 2021. Accordingly, calculations for the month of May 2022 are based on heat rates determined therein with request to adjust the impact of prior period in the pending quarterly tariff variation.

Further, with respect to heat rates of KCCP & SGTPS, Nepra issued its determination on September 2, 2020 and January 18, 2021 respectively, against which KE has filed review motions. The required adjustment will be incorporated after the final heat rates are determined.

Moreover, Nepra issued its determination regarding the approval of heat rate for BQPS-I Plant dated April 21, 2022. Accordingly, calculations for the month of May 2022 are based on approved heat rates.

A spokesperson of KE said that the proposed raise will be applicable to a one-month bill. From March 2022 to May 2022, furnace oil prices increased by 38 percent. On the other hand, from March 2022 to May 2022, RLNG prices increased by 50 percent.

Meanwhile the CPPA-G’s rates have increased by 53 percent as the rates of CPPA-G which were Rs 9.098 per unit in March have reached Rs 13.90 per unit.

Copyright Business Recorder, 2022

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