Latest news with #Rs6.62
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
16-04-2025
- Business
- Express Tribune
Karachi power consumers may get relief as K-E seeks Rs6.62 per unit tariff cut
Prior approval to NEPRA K-electric consumer may seen a huge relief over electricity bills. PHOTO: FILE Listen to article A significant reduction in electricity tariffs for Karachi consumers may soon be on the horizon, as a public hearing at NEPRA Headquarters concluded on the matter. K-Electric submitted a request for a Rs6.62 per unit reduction in electricity rates under the Fuel Charges Adjustment (FCA) mechanism. The proposal also included approval of fuel cost charges incurred from July 2023 to February 2025, Express News reported. K-Electric officials argued that a fuel cost adjustment amounting to Rs13.9 billion is still pending. NEPRA Member Rafiq Ahmed Sheikh pointed out that since November, negative fuel charge adjustments have been observed, indicating that consumers were supposed to receive relief. However, he noted that K-Electric brought forward older adjustments during this period of expected relief. A consumer representative expressed concern that the full benefit of the negative FCA has once again not been passed on to the consumers. Sheikh further remarked that if K-Electric fails to replace malfunctioning meters, the company itself will bear the losses. If the proposal is approved in full, it would result in a substantial relief of Rs6.6 billion for consumers. The reduction, however, will not apply to lifeline consumers, protected consumers, pre-paid meter users, and electric vehicle charging stations.
Express Tribune
09-04-2025
- Business
- Express Tribune
KE consumers to receive Rs6.62/unit relief
The electricity consumers of Karachi are set to enjoy a relief of Rs6.62 per unit in electricity bills on account of Fuel Charges Adjustment (FCA) for the month of February 2025. The KE consumers have been enjoying a relief in prices of electricity for the last few months due to a reduction in the prices of energy being used in electricity generation. The latest proposed adjustment reflects continued fluctuation in energy prices, offering further respite in the form of lower charges. According to details, the National Electric Power Regulatory Authority (NEPRA) has scheduled a public hearing for April 16 to consider KE's request for a provisional negative FCA of Rs6.62 per unit for February 2025. Sources reveal that KE has submitted the FCA petition using the interim reference tariff from March 2023, reporting a negative variation of Rs6.662 billion in fuel costs during the month in question. KE has further requested that NEPRA consider the adjustment of pending actualised fuel cost componentsrelated to partial load, open cycle operations, degradation curves, and startup costsaccumulated from July 2023 to February 2025. KE claims that Rs13.9 billion remains unadjusted, of which Rs7.4 billion was already set aside in FCA decisions for November and December 2024. The power utility has urged NEPRA to allow recovery of the remaining adjustment from the negative FCA amounts of January and February 2025, arguing that this would avoid placing a financial burden on consumers at a later stage. NEPRA has identified three key issues for deliberation during the upcoming hearing on K-Electric's FCA request. These include whether the requested negative fuel charges adjustment for February 2025 is justified, whether KE adhered to the merit order in dispatching electricity from its own power plants and procuring power from external sources. In addition, it has also urged deliberation on whether the utility's request to adjust actualised fuel costsarising from partial load operations, open cycle usage, degradation curves, and startup costsfrom July 2023 to February 2025, is justified under the prevailing regulatory framework. NEPRA has invited the interested stakeholders to submit written or oral comments, and the details of KE's petition, relevant rules and determinations are available on NEPRA's website.
Express Tribune
04-04-2025
- Business
- Express Tribune
Karachi power consumers may get another major relief
Listen to article Electricity consumers in Karachi may soon see a significant reduction in their power bills, as a proposal has been submitted to the National Electric Power Regulatory Authority (Nepra) seeking a decrease in monthly tariffs, Express News reported. According to official sources, the cost of electricity could be reduced by Rs6.62 per unit for Karachi-based consumers. The proposed relief falls under the monthly fuel cost adjustment (FCA) mechanism. The application, filed with Nepra, pertains to the FCA for the month of February. The regulatory authority is expected to announce a hearing date on the matter soon. Following the hearing, Nepra will make a decision regarding the proposed tariff reduction. On Thursday, Prime Minister Shehbaz Sharif announced a reduction in electricity prices for domestic consumers by Rs7.41 per unit. The price cut is part of the government's efforts to provide relief to Pakistanis while working to strengthen the economy. For Karachi consumers, electricity will be Rs3.02 per unit cheaper, while the rest of the country will see a reduction of Rs1.90 per unit as per first announcement.
