Karachi, November 18, 2022: NEPRA announced to conduct a public hearing on 30 November over the petition submitted by K-Electric on account of Fuel Charges Adjustments (FCA) for October 2022 and Quarterly Adjustments for July to September 2022.
For the month of October, K-Electric has filed a petition for the negative FCA at a rate of PKR 1.883/kWh and is the fourth consecutive negative FCA since July. On the other hand, KE has also requested a reduction of PKR 7.833 / kWh rupees on account of Quarterly Adjustments. According to the spokesperson of the power utility, the impact of quarterly adjustments is usually not passed to consumers under the uniform tariff policy applicable across the country. However, the final decision rests with the Federal Ministry of Energy, Government of Pakistan, and the NEPRA Authority.
FCA is dependent on the global prices of fuel and is passed on to consumer bills under the prescribed rules and regulations of NEPRA and the Government of Pakistan. The negative FCA for October 2022 is primarily due to a decrease in prices of RLNG, Furnace Oil, and power purchased from CPPA-G. The price of RLNG in October 2022 decreased by 16% from September 2022. The price of Furnace Oil in October 2022 has decreased by 6% from September 2022, and the price of power purchased from CPPA-G in October 2022 has decreased by 6% from September 2022.
As per KE spokesperson, FCAs are approved by the regulator, NEPRA, after conducting scrutiny and public hearing, which are conducted independently for KE and state-owned entities (XWDISCOs). The authority also specifies the month during which the charge is applied in consumer bills. This FCA petition is in line with the mechanism given in KE’s Multi Year Tariff whereby changes in fuel prices, generation and power purchase mix are passed through along with certain annual adjustments.
K-Electric (KE) is a public listed company incorporated in Pakistan in 1913 as KESC. Privatized in 2005 KE is the only vertically integrated utility in Pakistan supplying electricity within a 6500 square kilometers territory including Karachi and its adjoining areas. The majority shares (66.4%) of the company are listed in the PSX owned by KES Power, a consortium of investors including Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding), Kuwait, and the Infrastructure and Growth Capital Fund (IGCF). The Government of Pakistan is also a minority shareholder (24.36%) in the company.