Karachiites may expect Rs4.84 power tariff cut

Express Tribune

21-03-2025

Consumers of K-Electric (KE) could expect a relief of Rs4.84 per unit in their electricity bills, as the National Electric Power Regulatory Authority (Nepra) considered on Thursday a plea for tariff reduction on account of fuel adjustment for the month of January, 2025.
The KE had submitted a petition before the power regulator, seeking reduction in the power tariff up to Rs4.84 per unit on account of fuel adjustment. If allowed, the overall benefit to the consumers could reach approximately Rs4.695 billion.
At the monthly Fuel Charge Adjustment (FCA) hearing, stakeholders advocated for passing full benefit to the consumers. However, the KE maintained its position of partial adjustment, citing accumulated costs related to partial load charges, open-cycle operations, degradation curves, and start-up costs.
The KE said that these costs might require adjustments during the peak summer months. It emphasised that this approach aimed at preventing excessive financial burden on consumers, when electricity consumption and bills were typically higher.
Addressing queries on reliance on the national grid, KE's Chief Generation & Transmission Officer, Abbas Hussain, highlighted that generation peaks reached 2,400MW during the month, underscoring the need to retain KE's own generation capacity to meet demand beyond NTDC's supply.
KE produced only 4% from its own resources. Responding to a question from the regulator regarding this production, KE authorities said that plants were run to maintain minimum load on the system. About integration with the national grid, KE confirmed that all four interconnections were operating optimally.
However, pending matters on the KE Kanupp Interchange (KKI) Grid (KKI interconnection) remained due to ongoing legal and administrative processes at the NTDC's end. Nepra urged the NTDC to provide clarity on its timeline for completing the pending transmission line.
KE's Chief Executive, Moonis Alvi, reiterated that additional interconnections would only be viable with a firm commitment of increased supply from the NTDC. He stated that the NTDC would supply 1,200MW to the KE on a firm basis, while an additional 1,000MW will be provided, subjected to availability.
Alvi also highlighted that the NTDC's commitment to additional power supply was crucial before further interconnections can be developed. It was informed that government had provided a subsidy of over Rs800 billion to the KE consumers.
Clarifying the subsidies, Nepra reaffirmed that KE did not receive operational subsidies, instead, the federal government provided subsidies to the KE consumers to maintain tariff uniformity under the national uniform tariff policy.
A Nepra official explained that the TDS was based on the difference between the determined and applicable tariff, ensuring affordability for consumers.
The KE also addressed concerns regarding lower consumption and demand, attributing it to the decline due to cold weather and increased rooftop solar adoption. The company suggested that the planned shift of captive power plants to the grid could help revive industrial demand.
Separately, Nepra has sought details from all XWDISCOs regarding the interest earned on amounts accumulated in payables to net-metering prosumers. On the occasion, industry representative Rehan Javed stressed the need for predefined cost limits to ensure efficiency.
He emphasised that costs should only be passed on to consumers after verification. Nepra acknowledged these concerns, stating that the authority must strike a balance between consumer protection and industry sustainability.
Tanveer Barry, Vice President KCCI appreciated the KE's efforts in Ramzan and ending loadshedding upon their request. Later, the authority reserved its decision which would be issued after reviewing the data and submissions presented by the KE during the hearing.