Nepra approves paisa 51/kWh increase in KE tariff
ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has approved an increase of 51 Paisa/kWh in KE’s tariff under the Quarterly Tariff Adjustment (QTA) mechanism and a negative adjustment of 5.1261 Rs/kWh in FCA for September 2022.
On Friday, the regulator issued two decisions. One is related to the government’s motion to pass Paisa 50.87/kWh to KE consumers for the third quarter of 2021-2022 to maintain a uniform tariff across the country, while the second is related to FCA for September 2022.
The Authority, in order to give a fair opportunity to the Federal Government to present its case and to all relevant stakeholders, has decided to hold a hearing in the matter, which was held on November 8, 2022.
During the hearing, the Federal Government reiterated its submissions made in the petition and argued that NEPRA had determined the Discos quarterly adjustment for the 3rd quarter for fiscal year 2021-22 of Re 0.5087/kWh . In accordance with the Discos notification, the MoE filed the petition for the recommendation of the final consumer tariff, to charge the same amount to the K-Electric consumer in order to standardize the tariff.
The government plans to put the FCA mechanism of KE on an equal footing with other Discos
Following the Authority’s request to automatically apply the quarterly adjustments determined for Discos to K-Electric at the time of its determination, the MoE advised that the quarterly Discos adjustments are determined and notified by the Authority, so that they are applied automatically. However, in the case of K-Electric, for the purposes of rate standardization, approval is sought from the federal government.
Tanvir Barry, representing KCCI, argued at the hearing that the proposed adjustment of 0.5087 Re/kWh cannot be charged to K-Electric consumers. The MoE responded that currently K-Electric’s fixed tariff is around Rs 43/kWh, while its currently applicable tariff is around Rs 26/kWh, resulting in an annual subsidy of around Rs 291 billion. Rs.
Following Arif Bilwani’s observations that K-Electric’s tariff compared to the rest of the Discos is not uniform in the measurement of monthly FCAs, the MoE explained that in order to standardize the monthly FCAs of KE and Discos, a summary was prepared and once approved by the federal government, it would be subject to review by the Authority.
NEPRA observed that despite the proposed increase of Re0.5087/kWh for all categories of consumers except lifeline, the Federal Government would receive a subsidy of approximately Rs 291 billion as explained by the Government during the hearing, after which the Authority decided to accept the request filed by the federal government.
The Authority also accepted the request of the Federal Government to publish a separate tariff schedule (SoT) for the authorized increase of 0.5087 Re/kWh for all consumer categories, except for the lifeline. The increase will be applicable for a period of three months – November 2022, December 2022 to January 2023, on consumption in September 2022, October 2022 and November 2022 respectively. The amount thus authorized will be taken into account by K-Electric in its grant applications. The federal government was asked to adjust this amount when processing K-Electric’s grant applications.
NEPRA held a public hearing on October 25, 2022 to determine the actual financial impact of the FCA on KE consumers in September, as KE had requested negative Rs 4.622/kWh. However, NEPRA has approved a negative FCA of Rs5.1261/kWh for the month of September 2022.
According to NEPRA, the negative impact for August was Rs 4.89/kWh compared to Rs 5.1261/kWh, implying that the total negative impact will be 24 Paisa/kWh for September 2022.
The negative adjustment applies to all categories of consumers except essential consumers, domestic consumers consuming up to 300 units, agricultural consumers and K-Electric Electric Vehicle Charging Station (EVCS) consumers. The negative monthly FCA adjustment is also applicable to domestic consumers with time-of-use (ToU) meters regardless of their level of consumption.
Copyright Business Recorder, 2022