NEPRA approves relief for KE consumers
The National Electric Power Regulatory Authority (NEPRA) has approved a relief of Rs3.64 per kilowatt-hour (kWh) on account of K-Electric's (KE) Fuel Charges Adjustment (FCA) for February 2025.
The adjustment will be reflected in consumer electricity bills for May 2025.
In its decision, NEPRA also provisionally withheld Rs3 billion from KE's claims related to partial load operations, open cycle usage, degradation curves and start-up costs.
The step aligns with the authority's generation tariff determination for the control period beginning July 2023 and aims to settle pending claims without transferring the burden to consumers in future adjustments.
Fuel charges adjustments are made to account for shifts in global fuel prices and changes in the power generation mix.
The costs, once reviewed and approved by NEPRA, are passed on to consumers, often in the form of negative FCAs when international fuel prices decline. NEPRA determines these rates, which are then notified by the federal government.
According to NEPRA's latest ruling, the negative FCA will apply to all consumer categories except lifeline users, domestic protected consumers, Electric Vehicle Charging Stations (EVCS) and prepaid users under all categories who have opted for prepaid tariffs.
KE noted that a negative FCA of Rs3.6396/kWh has been provisionally approved, subject to a final adjustment once NEPRA determines its Multi-Year Tariff (MYT) for FY202430.
Any cost difference under the final MYT will be adjusted in future billing cycles. NEPRA has instructed KE to apply this negative FCA to all eligible consumer categories.
The adjustment will appear separately on consumer bills based on units consumed during the relevant month. For any May 2025 bills issued prior to this decision's notification, the relief will be applied in subsequent billing cycles.
NEPRA's decision also stipulates that terms under the Winter Demand Initiative will apply where relevant. KE must incorporate the February 2025 FCA in the May 2025 billing cycle and ensure compliance with any applicable court orders.
During the public hearing, KE stated that it followed the Economic Merit Order (EMO) in dispatching its own power generation and purchasing electricity from external sources.
The company submitted hourly EMO data and monthly operational reports for NEPRA's verification.
KE reiterated that Rs13.9 billion remains pending for adjustment for the period between July 2023 and February 2025. Of this, NEPRA has already accounted for Rs9.4 billion in its FCA decisions for November 2024 through January 2025.
KE requested that the remaining Rs4.5 billion be adjusted against the current negative FCA to avoid future billing impact on consumers. It further pointed out that similar costs have been approved for XWDISCOs in their monthly FCAs.
In reviewing KE's February 2025 FCA request, NEPRA found discrepancies in fuel cost components.
For electricity purchased from CPPA-G, KE had applied a rate of Rs8.2292/kWh, slightly above the approved Rs8.2272/kWh, resulting in a downward adjustment of approximately Rs1.64 million.
Similarly, for electricity procured from FPCL, KE used a fuel cost component of Rs18.3963/kWh, whereas NEPRA had revised the rate to Rs18.1969/kWh, effective from October 31, 2024. This led to an additional negative adjustment of Rs0.297 million, which has been incorporated into the February 2025 FCA.
Taking these corrections into account, NEPRA has calculated a negative FCA of Rs6.6195/kWh for February 2025, amounting to an overall relief of Rs6.664 billion for consumers.
NEPRA also acknowledged KE's separate claim of Rs13.9 billion on account of partial load operations, open cycle use, degradation and start-up costs.
KE has requested that these amounts be offset against the current negative FCA to enable recovery without increasing future consumer tariffs.
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