K-Electric consumers are likely to pay an additional Rs0.98 per unit in their electricity bills as the National Electric Power Regulatory Authority (Nepra) has reserved its judgement on the company’s petition for fuel cost adjustment (FCA) for the month of August.
At a public hearing on a petition filed by K-Electric, presided over by Nepra Chairman Tauseef H Farooqi, the regulator noted that expensive electricity was generated through expensive fuel during the month of August and efficient plants were not fully utilised.
In its petition, K-Electric sought an increase of Rs0.98 per unit in power tariff under the monthly FCA. The company informed the regulator that the cost of electricity increased due to shortage of gas and running power plants against the merit order on imported furnace oil (RFO).
A Nepra official said that the K-Electric petition showed that 14% electricity was generated through RFO, which resulted in a higher generation cost.
K-Electric violated the merit order, maintained by the Ministry of Energy, for power generation, and it resulted in a burden of Rs943 million on the consumers.
Low gas pressure cost dearly to the company to the tune of Rs618 million. Expensive electricity generation by K-Electric would put a burden of Rs325 million on the consumers, the Nepra official said.
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The regulator instructed K-Electric to resolve the natural gas supply issue with Sui Southern Gas Company (SSGC) and if it was not resolved within the stipulated time period, a fine would be imposed on K-Electric.
K-Electric officials said that National Transmission and Despatch Company (NTDC) was not supplying more than 1,100 megawatts of electricity to the company.
The Nepra chairman said that the company was generating expensive electricity from its own power plants while it was getting relatively cheaper electricity from the national grid.
Farooqui sought an answer from the company on the issue. The company was directed to submit its reply within three days as to why it was resorting to expensive sources for electricity generation. The K-Electric official said that the FCA increase was Rs0.98 per unit and the reason for the raise was the hike in RLNG prices.
K-Electric Chief Financial Officer Aamir Ghaziani informed that the more efficient plants were not operated because of low pressure of gas. He said that K-Electric is making timely payments and SSGC should ensure high gas pressure.
The Nepra chairman further questioned why K-Electric was taking major share of its electricity from the national grid and closing expensive power plants.
Published in The Express Tribune, September 30th, 2021.
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