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ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) is all set to conduct a public hearing on Monday (today) on KE’s request for increase 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.

According to the power utility, FCA 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.

The power utility in FCA adjustment request has informed the regulator that its dispatches are as per Economic Merit Order (EMO) from its own generating units (with the available fuel resources) and import from external sources. The consumer’s representatives, Tanveer Barry, Aneel Mumtaz and Arif Bilwani will offer their comments on KE’s FCA adjustment request.

However, FPCCI, in its comments on the KE request of FCA adjustment, has stated that Pakistan is already registering highest inflation, which is in major contributed by high cost of energy, in which KE is also contributing its worst and high inflationary ingredient in supporting the inflation. Without structural reforms in power sector in specific in KE, there will be repetition of such adverse demands due to KE’s peculiar high cost generation and unbundled structure.

May FCA: NEPRA approves hike of Rs7.9/unit

The regulator has been advised to recommend closing of the high cost generation units supplying electricity to K-Electric and take immediate measures to un-bundle the present structure of KE; otherwise, the public exchequer loss and the inflation will continue to be contributed by its tariffs.

According to Engineer M.A Jabbar, FPCCI being the representative of private sector trade, industry and services do have serious observations in respect of almost no consideration of NEPRA in suggesting and addressing the required reforms in KE in the interest of political energy economy of the country.

The closing of all the inefficient power plants of KE supplying electricity from Gul Ahmed, Tapal and Bin Qasim should be substituted by stopping these and negotiating the normal situation supply from NTDC as the only solution to stop further adverse costing affects on destroying the stability of predictable production economy. FPCCI must see the actions of NEPRA to take place; otherwise, it has strong reservations to register complaints at the highest forums in the interest of our economy that is in many problems now.

“The issue regarding inclusion of power generated from BQPS-3 and COD also raises the question, if the same have already been approved by the authority? We can also collect the memory and records from the past hearing in which NEPRA had asked K Electric to delete this demand from MYT. The difference between unit cost of RLNG for different plants is also a magic question to be investigated in the instant determination of monthly fuel charge adjustment by NEPRA,” said FPCCI. The apex body of trade, industry and services, said that another point which also is required to be investigated by regulator: as what are the reasons of decreased use from source of energy from CPPA–G as compared to last month. One would wonder that either if the situation is either deceptive, unfair operation by K Electric or the regulator may come with the guidance for balancing the rights of consumers against the K- Electric.

Copyright Business Recorder, 2022

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