Nepra raises power tariff for Karachi by Rs3.03 in December

ISLAMABAD: Karachi’s electricity consumers will face an additional Rs3.0362 per unit charge in their December bills, following a National Electric Power Regulatory Authority (Nepra) decision Friday allowing K-Electric to collect extra fees as a fuel charges adjustment (FCA) for July 2024.

The FCA, expected to have a financial impact of Rs6.105 billion, will apply to all consumer categories except for lifeline, prepaid, and electric vehicle charging station users. Nepra based the calculation on an interim tariff set in March 2023, reflecting higher generation costs for K-Electric in July.

The decision came after Nepra reviewed KE’s fuel cost data for July 2024, following its provisional assessment of the company’s power generation and purchases. According to NEPRA’s official decision, the total cost of KE’s own generation in July 2024 amounted to Rs28.449 billion, while power purchases from external sources cost Rs9.818 billion, resulting in a combined fuel cost of Rs38.267 billion. This marked a significant increase from March 2023, the reference period, where the total fuel cost stood at Rs23.638 billion. The data also shows that KE sent out 1,076 gigawatt-hours (GWh) of electricity in July 2024, compared to 520GWh in March 2023, further highlighting the discrepancy in fuel costs.

The FCA breakdown reveals that KE’s own generation cost Rs14.15 per unit (kWh), while power purchased from external sources was billed at Rs4.88 per unit, resulting in a total fuel cost component of Rs19.03 per unit for July 2024.

K-Electric’s (KE) total generation capacity stands at 3,555MW, including IPPs, with a supply of 2,702MW in July 2024. As KE’s fuel sources fluctuate each month, factors such as plant efficiency, load demand, ambient conditions, and start-up frequency contribute to variations in fuel consumption. Additionally, KE is engaged in a longstanding dispute with Sui Southern Gas Company (SSGC) over decade-old dues, which KE attributes to government delays. While mediation continues, KE remains current on its gas payments.