The National Electric Power Regulatory Authority (NEPRA) has received a Fuel Charges Adjustment (FCA) request from K-Electric for January 2024 on a provisional basis, offering three potential scenarios for adjustment, according to sources familiar with the matter. The proposed adjustments range from Rs 3.34 per unit to Rs 8.78 per unit.
Caretaker Prime Minister Anwar ul-Haq Kakar recently instructed NEPRA to address pending issues concerning K-Electric, including the determination of a multi-year tariff. Concerns raised by Saudi investors regarding previous investments were highlighted during meetings between Saudi Arabia’s Minister for Energy and Pakistani authorities in Riyadh and Dubai.
Arguments were reportedly exchanged between K-Electric and NEPRA teams during the tariff petition submission process. NEPRA had recently permitted Distribution Companies (Discos) to increase their FCAs by Rs 7.05 per unit for January 2024.
In response, K-Electric has emphasized the need for provisional approval of the FCA to ensure timely cost recovery and prevent further accumulation of adjustments for consumers. The provisionally approved FCA will be subject to adjustment based on the final determination of the tariff petition.
K-Electric has outlined three scenarios for FCA adjustments, including comparing actual fuel costs against reference monthly fuel costs and annual weighted average reference costs. These scenarios aim to avoid systematic under/over recovery of costs and additional working capital implications.
The tariff petition is pending determination, and K-Electric seeks NEPRA’s approval to facilitate timely cost recovery while awaiting the final decision.
Story by Mushtaq Ghumman
