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Express Tribune
4 days ago
- Business
- Express Tribune
K-Electric proposes formula for loadshedding-free Karachi
Listen to article K-Electric has proposed a formula to eliminate electricity load-shedding in the metropolitan city. Three hundred out of 2,129 feeders in the metropolis account for 87% of power losses, which is the main reason for blackouts, KE's CEO Moonis Alvi said while speaking to a delegation of the Council of Economic and Energy Journalists (CEJ) on Saturday. 'If the government takes over these 300 feeders and manages the internal electricity distribution in these areas, K-Electric will be much closer to making Karachi load-shedding-free,' Alvi said, adding that KE is ready to supply electricity to these 300 feeders, but the responsibility for bill recovery from these areas would rest with the government. CEO Alvi claimed that 70% of Karachi is already exempt from load-shedding. K-Electric is working on introducing new technology to prevent power pilferage from feeders. He warned that any tampering with PMTs (Pole-Mounted Transformers) could lead to technical faults that may take up to three days to fix. He reiterated the offer to the government to help manage the internal electricity system in these areas. The KE CEO further stated that K-Electric's Multi-Year Tariff (MYT) will not adversely affect ordinary consumers. Rather, it will encourage foreign investment in the city's power supply system. 'The National Electric Power Regulatory Authority will review the MYT each year based on the level of investment,' he added. Alvi said that implementation of the MYT could make Karachi up to 90% load-shedding-free by 2030. By then, the number of power consumers in the metropolis is expected to reach five million, and power transmission will increase to 5,000MW. Responding to a question, Alvi said that KE is ready to supply electricity to captive power industries by connecting them to the grid. "We are prepared to follow the agreed timeline with the government and stakeholders for this transition." Industrial activity in Karachi has increased over the past few months, leading to a rise in electricity demand, he added.
Business Recorder
28-05-2025
- Business
- Business Recorder
NA panel irked by ‘non-professional' attitude of KE CEO
ISLAMABAD: The National Assembly Standing Committee on Industries and Production, Tuesday, expressing serious anger over the informal, unofficial and non-professional response of K-Electric (KE) chief executive officer (CEO) observed that the officer seemed unfit for the key position. The committee meeting held here under the chairmanship of Syed Hafeezuddin to discuss matters pertaining to Utility Stores Corporation (USC) and K-Electric. The committee members question CEO K-Electric why it has not withdrawn court cases regarding power subsidies provided to various consumers during coronavirus crisis. Responding to the queries of committee members, K-Electric Moonis Alvi expressed his inability to withdraw court cases, which made the committee members furious and declared his response an insult to the directions of parliamentary panel. The CEO K-Electric tendered his apologies but the committee members rejected his apology and expelled him from the meeting. The panel grilled the Federal Board of Revenue (FBR) for failing to implement its directives regarding the inclusion of the iron and steel sector in the Export Facilitation Scheme. The committee held FBR responsible for a potential loss of $1.5 billion in exports due to the delay in issuing the required Statutory Regulatory Order (SRO). Expressing strong disapproval, the chairman remarked that FBR was ignoring parliamentary instructions and announced a formal notice against the department. The frustration was further fuelled by the continuous rotation of FBR representatives at committee meetings. 'First, an FBR lady used to come, then Faisal used to come, and today another gentleman has come; we will bear him too,' the chairman remarked sarcastically, urging the media to highlight the FBR's conduct. Another pressing matter discussed was the financial crisis facing the Utility Stores Corporation (USC). With Rs7.2 billion reportedly dues from the corporation, FBR officials claimed USC had demanded Rs18.50 billion. The chairman urged both sides to resolve the dispute immediately to prevent employee layoffs. 'We want Utility Stores employees not to be unemployed,' Hafeezuddin said, assuring union representatives that their jobs would be protected. Throughout the session, the committee emphasised accountability across public and private institutions and made it clear that delays, defiance, or neglect of parliamentary directions would not be tolerated. The committee decided to present a unanimously agreed report on the closure of USC during the Session to safeguard the future of USC employees. It sought a detailed report by Pakistan Services for Quality Standard Authority on less export of Pakistan dairy products, meat and honey. The standing committee issued key recommendations during its sitting debating the issues of K-Electric regarding load shedding in industrial sector of Karachi, closure of Utility Stores Corporation's sacked employees, role of Pakistan Services for Quality Standards Authority in maintaining vehicle quality standards and agriculture-related products for local use and export to USA, UK and European countries. The committee assured its support to the ministry for legislation when and where required to remove hindrances in the progress of public benefits. Copyright Business Recorder, 2025
Express Tribune
23-05-2025
- Business
- Express Tribune
Rs5.02 tariff cut for KE consumers likely
Listen to article The consumers of K-Electric (KE) are set to enjoy a tariff relief of Rs5.02 per unit on account of fuel cost adjustment (FCA) for March 2025, which has been requested by the power utility in its petition submitted to the National Electric Power Regulatory Authority (Nepra). In that regard, Nepra conducted a public hearing on Thursday. If approved, the KE consumers will enjoy a total relief of Rs6.79 billion. The regulator reviewed various operational and financial matters presented by KE, including cost claims, fuel use, system efficiency and measures against electricity theft in Karachi. KE CEO Moonis Alvi reiterated the utility's firm commitment to tackling power theft through all necessary measures, but highlighted that the efforts were often met with violent resistance from those engaged in unlawful practices. He pointed to violent mob attacks against the utility and its staff, including female employees. He said the company infrastructure remained under significant threat and recent incidents in P&T Colony and Nazimabad signalled the gravity of the situation, where even law enforcement agencies found it difficult to safely evacuate KE staff. There had been instances where employees were unable to leave office premises until the next morning, held hostage by mobs, he added. Alvi requested Nepra to urge citizens to refrain from electricity theft and, at the very least, begin paying their previous month's bills. The KE management stated that 70% of its feeders were exempt from load-shedding while the remaining network with high levels of theft and non-payment of bills continued to face scheduled outages. It cited infrastructure damage due to theft as a contributing factor to network faults. Disconnection drives were ongoing in the theft-prone areas amid public backlash including mob attacks. It clarified that disconnections should not be considered a fault in the system; those were largely disconnections because of non-payment. Nepra sought a month-wise breakdown of the generation cost claim of Rs14 billion submitted by KE as well as asked for detailed documentation under the partial cost adjustment categories. KE officials assured the regulator that the required breakdown would be provided. Questions were also raised about KE's furnace oil stock valuing at Rs5 billion for the Bin Qasim Power Station-I (BQPS-I), which had a dependable capacity of 350 megawatts. Nepra asked as to why power generation was still being planned based on residual fuel oil (RFO) if the plant was reportedly not operational. KE responded that maintaining the fuel stock was in accordance with the regulatory requirements and selling it at a loss would not be economically feasible. Regarding the generation mix, industrialist Rehan Javed emphasised the need for considering solar power projects in the upcoming Indicative Generation Capacity Expansion Plan (IGCEP) as there had been unofficial media reports about their exclusion; something that would be detrimental to consumers in terms of access to affordable electricity. Nepra dismissed the hearsay, saying no formal decision had been submitted so far and a public hearing would be conducted regarding the IGCEP. It would be early to share any opinion or judgement, it said. A consumer highlighted the KE's consecutive negative FCA since September 2024 and asked about its comparison with other power distribution companies (DISCOs). Nepra officials elaborated that currently the KE's FCA was benchmarked against the reference fuel cost of March 2023 at Rs15.99 and all adjustments were based on that, as per Nepra's approved mechanism. He pointed out that once the updated tariffs were approved, the difference in FCA rates compared to other DISCOs was expected to narrow. Responding to a question on fuel mix and the potential impact of natural gas availability, KE officials stated that access to local gas could significantly reduce generation costs. Local gas is priced around Rs9 per unit compared to Rs22-24 per unit for re-gasified liquefied natural gas. As demand rises during peak summer, both KE and Nepra reiterated the importance of transparency, regulatory compliance and collaborative efforts to improve service delivery.
Express Tribune
17-04-2025
- Business
- Express Tribune
Karachiites may get Rs6.62/unit extra relief
Prior approval to NEPRA K-electric consumer may seen a huge relief over electricity bills. PHOTO: FILE Listen to article Karachi power consumers may receive an additional relief of Rs6.62 per unit in their electricity bills, over and above the government's announced tariff cut. The indication came on Wednesday as NEPRA concluded proceedings on a petition seeking a tariff reduction under the February 2025 fuel cost adjustment. If approved, the petition will allow K-Electric (KE) consumers to benefit from a total reduction of approximately Rs6.662 billion. KE reiterated its stance on partial adjustment, citing accumulated costs – a position that met with opposition from industrial stakeholders. KE's argument for partial adjustment rests on the principle of creating a financial cushion for consumers during the peak summer months, when both consumption and billing typically increase. Responding to a query about the petitioner bearing the cost of independent verification, KE's chief executive officer, Moonis Alvi, said that such a requirement aligns with global practices. He explained that applicants are routinely responsible for costs related to feasibility studies and risk assessments, including environmental evaluations during loan applications for new projects. On the issue of capacity payments in the generation tariff, NEPRA officials clarified that such payments are calculated based on availability and have always been part of the tariff structure. Previously, consumers only saw a one-rate tariff; under new regulations, the tariff is broken down into components for greater transparency. Tanveer Barry, Vice President of the Karachi Chamber of Commerce and Industry (KCCI), stressed the importance of timely data sharing by NEPRA to allow stakeholders to raise concerns without delay. NEPRA officials, however, stated that there were no delays on their end in fulfilling Service Level Agreements (SLAs), providing a detailed timeline to support this claim. Clarifying whether the proposed relief was part of the government's broader tariff cut, NEPRA said it was an additional benefit being extended by KE to its consumers. The authority has reserved its decision, which will be announced after reviewing the data and arguments presented by KE during the hearing. Stakeholders decry 'burden of rupee depreciation' During the hearing, industrial stakeholders also urged NEPRA to expedite approval of the multi-year tariff to provide stability for industrial planning and forecasting. Rehan Javed, an industrial representative, said that building production plans around provisional numbers hinders productivity and growth, ultimately affecting the country's economic trajectory. Industrial stakeholders criticised the government for negotiating an agreement with bagasse-based Independent Power Producers (IPPs) that would shift the burden of rupee depreciation onto consumers. During the public hearing, it was disclosed that consumers would shoulder 70% of the actual rupee depreciation when it comes to payments made to these IPPs. According to the amendment, "foreign O&M: PKR/USD depreciation shall be allowed only to the extent of 70% of the actual depreciation per annum. In case the PKR appreciates against the USD in a year, then 100% of such appreciation shall be passed on to the consumers." Participants noted the historical trend of rupee depreciation and argued it was unfair to place 70% of that burden on consumers. They contended that the sugar industry was already generating substantial profits, and bagasse-based IPPs were yielding additional profits. A representative from the power ministry responded by noting that consumers had previously been paying 100% of the depreciation cost, and the revised structure actually offers partial relief. Regarding a separate agreement with nine IPPs, it was revealed that consumers would benefit from a relief of Rs1 per unit. The Power Division, in its petition, sought to revise the fuel cost component of the tariff effective October 1, 2021. It proposed Rs4,500/ton as of October 1, 2021, with a 5% annual indexation. The FCC would be calculated at a calorific value of 7,000 BTU/kg. The working capital component would be reduced by 50% for all bagasse IPPs, except for Shahtaj, whose tariff does not include the WCC component. The petition further proposed a fixed return on equity (ROE) and return on equity during construction (ROEDC) at Rs168/USD, with no future USD indexation. The indexation of local O&M would be allowed at the lower of either 5% per annum or the actual average national consumer price index (NCPI) for the preceding 12 months for all bagasse IPPs. Moreover, IPPs may be allowed to sell electricity to bulk power consumers (BPCs) subject to amendments in their generation licence (GL) and energy purchase agreement (EPA), provided they commit to paying compensation to the central power purchasing agency (CPPA-G) for each unit supplied. The cap for insurance during operation would be 0.7% of the EPC cost for Chiniot Power Ltd., aligning with other bagasse-based IPPs. The reference O&M component for Chiniot Power Ltd. would also be reduced by 10%, bringing it in line with other similar IPPs. The petition also called for a revision in the sharing mechanism beyond the net annual plant factor for all bagasse-based IPPs, excluding Shahtaj.
Express Tribune
21-03-2025
- Business
- Express Tribune
Karachiites may expect Rs4.84 power tariff cut
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.
