ISLAMABAD: K-Electric has submitted a petition seeking a 76% increase in its base tariff, raising it by Rs 10.69 per unit to Rs 44.69 per unit under the Multi-Year Tariff (MYT) mechanism for the period from FY 2023-24 to 2029-30. The current base tariff stands at Rs 34 per unit.
The proposed adjustment includes the following components:
Cost of power EPP component: Rs 18.88 per unit
Cost of power CPP component: Rs 12.54 per unit
Transmission charges: Rs 3.48 per unit
Distribution charge: Rs 3.84 per unit
Operations & Maintenance (O&M): Rs 0.42 per unit
Retail margin: Rs 0.59 per unit
Recovery loss allowance: Rs 2.88 per unit
Working capital: Rs 2.07 per unit
The National Electric Power Regulatory Authority (NEPRA) has issued a notice inviting stakeholders to express their opinions within seven days.
K-Electric’s petition to NEPRA outlines a reference cost of power estimated at Rs 502.709 billion for FY 2024, translating to Rs 26.94 per kWh. With the requested distribution losses, the power purchase price per unit billed is Rs 31.41 per kWh. For FY 2024, the estimated units served are 18,660 GWh, with transmission charges amounting to Rs 55.738 billion based on a base tariff of Rs 2.99 per kWh. Distribution charges are estimated at Rs 61.385 billion for 16,004 GWh billed units, based on a base tariff of Rs 3.84 per kWh.
For FY 2024, K-Electric calculated the O&M component using the actual O&M amount of Rs 4.761 billion for FY 2023, indexed to the CPI of May 2023, resulting in Rs 6.758 billion or Rs 0.4223 per kWh. The O&M cost for subsequent years will be indexed annually with the CPI.
The power utility company has also requested a retail margin of 1.5%, translating to Rs 9.399 billion or Rs 0.5873 per kWh. The recovery loss for FY 2024 is estimated at Rs 46.063 billion or Rs 2.8783 per kWh, while the cost of working capital is forecasted at Rs 33.119 billion or Rs 2.0695 per kWh, indexed quarterly.
K-Electric emphasized that the requested tariff adjustments are essential for maintaining business sustainability and service quality. However, it clarified that these adjustments do not directly affect the rates charged to consumers, which will continue under the nationwide uniform tariff policy.
The base tariff of K-Electric was approximately Rs 34 per unit until FY 2023, when the last MYT expired. The proposed tariff is crucial for ensuring the company’s operational and financial stability, following similar processes undertaken by other electricity distribution companies in the country last year.
Story by Mushtaq Ghumman
