ISLAMABAD: K-Electric has sought a transmission base tariff of Rs2.9871 per unit for seven years (July 1, 2023, to June 30, 2030) based on revised assumptions.
KE, in its petition to the National Electric Power Regulatory Authority (Nepra) has submitted new estimates for the next seven years to make adjustments in the transmission tariff and distribution tariff.
According to Nepra, KE has requested the following indexation mechanism in terms of its transmission tariff: (i) O&M expense Rs0.5941/kwh to be indexed annually with Pak CPI; (ii) amount of deferred revenue, Rs0.0098/kWh as adjustment for revision in investment plan for additions; (iii) working capital, Rs0.0519/ kWh to be indexed quarterly with KIBOR and annual adjustment for changes in working capital requirements based on actualization of balances; (iv) Total financial impact of Return on Regulatory Asset Base - Cost of Debt (RoRB -COD) - will be of Rs1.5301 / kWh of which share of foreign component will be Rs1.1640 / kWh and Rs0.3661/ kWh on local component; (v) RoRD - Cost of Equity is estimated to be Rs0.6936/ kWh, to be indexed quarterly with USD to PKR exchange rate along with adjustment for revision in investment plan; and (vi) estimated financial depreciation will be Rs0.2272/ kWh, whose adjustment will be made through a revision in the investment plan.
Multi-Year Tariff mechanism: KE seeks Rs3.8/unit hike in base tariff for seven years
Nepra has informed all stakeholders/ interested/affected persons and general public that it has admitted the Multi-Year Tariff (MYT) petition filed by the power utility company for determination of its transmission tariff for the period from July 1, 2023 to June 30, 2030 in terms of Rules 4 of Nepra (Tariff Standards and Procedure) Rule, 1998.
All interested / affected person may participate in proceedings of tariff setting process in the following manner: (i) in terms of rules 6&7 of Nepra (Tariff Standards & Procedure) Rules, 1998, any interested person who desires to participate in the proceedings may file an intervention request within seven days starting from May 4, 2024. Such intervention request shall state the name and address of the person filing the intervention, objections and the manner in which the person is or is likely to be substantially and specifically affected by any determination in the proceedings. The intervention request may also contain the contentions of the person making the intervention, the relief sought and the evidence, if any, in support of the case; and (ii) any person may also file the comments in the matter and the Authority, if deemed fit, may permit participation of such person into the proceedings and may also consider those comments in the final determination.
Insiders claim that the Authority, which was citing several reasons for delay of admission of power distribution and transmission tariffs petitions, is now running at full speed, after being grilled at the highest level.
According to these insiders, the Authority is also picking up speed to approve KE’s claims of over Rs60 billion on account of write-offs, as its arms have been twisted at the “proper forum”.
The sources said, Saudi Arabia’s Energy Minister, has raised the issue of KE with Prime Minister Shehbaz Sharif during his recent visit to Riyadh, saying that treatment with M/s Aljomaih Group discourages Saudi investors to invest more in Pakistan.
CEO Aljomaih is also expected to be part of Saudi investors’ delegation which is arriving on Sunday (today).
Copyright Business Recorder, 2024
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