The K-Electric has informed the National Electric Power Regulatory Authority (Nepra) that it is ready to pay Rs10.262/unit or cumulative Rs12.08 billion back to power consumers in February 2023 bills on account of fuel charges adjustment (FCA) for December 2022.
The Karachi-based power utility has submitted its application to the power regulator, which would hold a public hearing on it on January 30, 2023, to know if the requested fuel charges variation was justified and whether the company had followed the economic merit order (EMO) while giving dispatch to its power plants and power purchases from private power suppliers.
Interestingly, in its earlier decision for November’s FCA, Nepra decided to refund Rs7.43 per unit to consumers in their January 2023 bills with a total impact of Rs4.11 billion on the company.
If the regulator accepts the plea of K-Electric, then this adjustment/relief would be available to all user categories of KE except lifeline power consumers, domestic consumers consuming up to 300 units and agricultural consumers and electric vehicle charging stations (EVCS).
This would be the sixth month in a row since July 2022 the regulator has instructed the K-Electric to reimburse the consumers’ specified per-unit charges.
A spokesperson of the company said, “For the past consecutive months, fuels such as RLNG and furnace oil have seen a consistent decrease in the global market, which is enabling KE to benefit its customer base. This is also possible due to the efficient and effective utilisation of KE’s generation fleet to supply energy to Karachi.”
The FCA is incurred by utilities due to global variations in the fuel prices used to generate electricity and change in the generation mix. Furthermore, the consumers also get benefits when fuel prices decline as compared to the reference month. “December’s FCA was lower primarily due to a reduction in the prices of RLNG, furnace oil and power purchased from CPPA-G [Central Power Purchasing Agency-Guaranteed] by 17 percent, 15 percent, and 29 percent respectively as compared to September 2022,” he said.
It is to be noted that for earlier months, the FCAs were refunded to consumers at the direction of the regulator. For October’s FCA, the Nepra had directed to refund Rs2.456 per unit to consumers in their December bills. It had a total impact of Rs4.11 billion on the company. FCA for September 2022 was a refund of Rs5.126/unit to clients in their November bills with an impact of around Rs9 billion.