Nepra hikes power tariff for KE consumers

ISLAMABAD-Nepra has increased the power tariff by Re 0.78 per unit, Rs 1.97 per unit and Re 0.61 per unit respectively for the quarters of April to June 2019, July to September 2019 and January to March 2020 for the K-Electric (KE) consumers.

National Electric Power Regulatory Authority’s latest determination regarding K-Electric’s Tariff Fuel Cost Adjustment (FCA) and Tariff Differential (TDF) claims for three quarters amount to an additional subsidy of Rs 80 billion. 

However, the burden of Rs 80 billion will not be transferred to the KE consumers to keep the electricity prices uniform across the country and the federal government will pay subsidy to the power consumers of Karachi.

This payment of Rs 80 billion is in addition to the more than PKR 130 billion in past TDF claims that have been notified and are pending for several years. A notification issued here stated that National Electric Power Regulatory Authority (Nepra) has allowed K-Electric (KE) to increase power tariff by up to Rs 1.97 per unit for three quarters.

At present, government implements the policy of uniform tariff for all Discos. The same policy is also applied to KE. With government’s policy of uniform consumer tariff across the country, these variations will not impact consumers and will be included in Tariff Differential Subsidy by government.

Nepra decision also allowed KE to reduce power tariff by Rs 0.02 per unit for one quarter.

Nepra has determined Quarterly Tariff variation for the period April 2019 to March 2020 applicable on the period July-19 to June-20.

Nepra had allowed tariff increase by Rs 0.78 per unit for the quarter April to June 2019, July to September 2019 Rs 1.97 per unit and January to March 2020, the regulator allowed increase in tariff by 0.61 per unit.

Since the federal government has a uniform tariff policy across the country including K-Electric consumers, therefore, the impact of aforementioned quarterly adjustments would be adjusted in the Tariff Differential Subsidy (TDS) of K-Electric, thus may not have any impact on consumers, the statement said.

However, the regulator had decided to reduce the electricity price for quarter from October to December 2019 by Rs 0.02 per unit. The Authority, among other adjustments, also did not allow write-off claim of K-Electric of Rs.4,051 million.

The determinations are in accordance with the mechanism given in KE’s Multi Year Tariff whereby changes in fuel prices, generation and power purchase mix are passed through along with certain annual adjustments. It is important to note that KE has already incurred these costs and paid the costs to fuel suppliers and for external power purchases.

The federal government will make the final notification regarding the Nepra’s decision.