KE seeks tariff cut during heated NEPRA hearing

K-Electric (KE) has requested a power tariff reduction of Rs0.16 per unit due to fuel cost adjustments (FCA) for September 2024.

During a National Electric Power Regulatory Authority (Nepra) hearing on KE’s September FCA, tensions rose when a member of the public questioned the perceived favouritism toward KE. The speaker pointed out discrepancies between fuel adjustment tariffs for KE and Central Power Purchasing Agency (CPPA-G), raising concerns over Nepra’s approval of KE’s generation tariff last week.

Accusations that Nepra was unfairly siding with KE intensified the dialogue, with claims that the regulatory process was a “fixed match” that favoured the utility while burdening consumers. The regulator responded by inviting the public representative to a separate review to address these grievances, ensuring full transparency. The authority also clarified that it consistently provides detailed justifications for its decisions, urging the public to review them before questioning the authority’s judgment.

Nepra further clarified its role as a regulatory body that enforces compliance within existing policies rather than creating new ones, adding that drastic tariff cuts across the sector would not benefit anyone.

Nepra’s message was clear—while empathetic to consumer concerns, decisions are based on thorough reviews to ensure fairness in electricity generation and distribution.

KE officials explained that the adjustment was due to a shift in the fuel mix, with a significant decrease in furnace oil usage as the availability of the BQPS-3 unit allowed greater reliance on RLNG. Furnace oil-based generation dropped from 13% to 2% compared to the reference month. KE further assured Nepra of their adherence to Economic Merit Order (EMO) protocols, submitting hourly compliance reports, with the latest report provided already submitted. Officials clarified that minor variations in units dispatched were due to planned outages by CPPA-G.

Officials also reported a decline in power demand in Karachi, aligning with a national trend, though they anticipated growth driven by an improving economy and lower borrowing rates.

KE compared its requested tariff relief with the Rs0.71 per unit relief granted to XWDISCOs, noting that KE’s FCA adjustments have generally been lower than those of the national grid in recent months. Nepra confirmed that KE’s Multi-Year Tariff (MYT) petition for FY24–FY30 is still under review, with reference pricing based on March 2023 data. Questions also surfaced regarding fatality incidents in KE’s area for 2022–2023. Nepra clarified that all cases undergo rigorous investigation, and negligence by KE was ruled out in 32 incidents. Compensation has been mandated in cases where utilities are found liable, though Nepra’s remit does not extend to enforcement. Unlike other utilities that challenged compensation orders in court, KE complied. Nepra has reserved its decision and will later issue a formal notification detailing the timing and amount of the FCA adjustment for customer relief.