NEPRA to Conduct a Public Hearing on KE’s Petition for FCA

NEPRA announced to conduct a public hearing on 31 August over the petition submitted by K-Electric on account of Fuel Charges Adjustments (FCA) for July 2022 and Quarterly Adjustments for April to June 2022.

For the month of July, K-Electric has filed a petition for a negative FCA at the rate of PKR 3.47/KWh. On the other hand, KE has requested an increase of PKR 14.533 / kWh rupees on account of Quarterly Adjustments.

According to the spokesperson of the power utility, the Impact of quarterly adjustments is usually not passed to consumers under the uniform tariff policy applicable across the country. However, the final decision rests with the Federal Ministry of Energy, Government of Pakistan and the NEPRA Authority.

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July’s FCA is lower compared to the previous month primarily due to decrease in fuel prices. The price of power purchased from CPPA-G in July 2022 has decreased by 31% as compared with June 2022.

Similarly, for RLNG, the price in July 2022 decreased by 16% from June 2022. For Furnace Oil, the price in July 2022 increased by 4% from June 2022.

As per KE’s spokesperson, fuel adjustment is reviewed every month and is applicable on consumer bills for only one particular month per applicable tariff across the country.

FCA is incurred by utilities due to global variation in fuel prices used to generate electricity and change in the generation mix. Furthermore, Consumers also get benefit when fuel prices decline as compared to reference month.

FCAs are applied after NEPRA’s scrutiny & public hearings, which are conducted independently for KE and state-owned entities (XWDISCOs). Alongside final approval on the cost to be charged to consumers, the NEPRA Authority also specifies the period during which these costs can be applied to consumer bills. The charges may be split in multiple months as per NEPRA Authority’s directions to facilitate consumers.

About K-Electric

K-Electric (KE) is a public listed company incorporated in Pakistan in 1913 as KESC. Privatized in 2005 KE is the only vertically integrated utility in Pakistan supplying electricity within a 6500 km2 territory including Karachi and its adjoining areas.

The majority shares (66.4%) of the company are listed in the PSX owned by KES Power, a consortium of investors including Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding), Kuwait, and the Infrastructure and Growth Capital Fund (IGCF). The Government of Pakistan