ISLAMABAD: K-Electric (KE) has submitted a request for a negative Fuel Charges Adjustment (FCA) of Rs 4.84 per unit for January 2025, which would provide financial relief of Rs 4.695 billion to its consumers.
Additionally, KE is seeking approval to adjust Rs 13.5 billion in pending fuel cost variations from previous months. The National Electric Power Regulatory Authority (NEPRA) will hold a public hearing on March 20, 2025, to review the request.
In its submission, KE explained that following the approval of its Generation Tariff post-June 2023, it had submitted revised partial load, open cycle, degradation curves, and startup costs for approval. The company is also requesting the adjustment of Rs 13.5 billion for the period from July 2023 to January 2025, of which Rs 5.4 billion had been set aside in the FCA determination for November 2024.
KE has urged NEPRA to allow these adjustments through negative fuel cost variations for December 2024 and January 2025, ensuring consumers are not burdened in the future.
Key issues for the upcoming hearing include:
The justification for the FCA adjustment request.
KE’s adherence to the merit order in dispatching power.
The validity of KE’s request to adjust accumulated fuel costs.
In December 2024, NEPRA’s Member (Technical), Rafique Ahmad Shaikh, emphasized the need for KE and NTDC to collaborate on increasing the supply of cheaper electricity from the national grid by resolving interconnection issues. He noted that K-Electric’s electricity sales in December 2024 declined by 6.6% year-on-year, with industrial sales falling 5.7% compared to December 2023 and 9.7% compared to November 2024.
KE’s power generation mix in December 2024 included 19% from its own plants, 7% from Independent Power Producers (IPPs) and Captive Power Plants (CPPs), and 74% from NTDC. However, NTDC’s generation cost stood at Rs 9.60/kWh, significantly lower than KE’s Rs 18.63/kWh. Despite a drawl capacity of 1,600 MW from NTDC, KE utilized only 985 MW (62%) in December 2024, leading to higher generation costs.
KE clarified that its RLNG plants operated at costs comparable to those within the NTDC system and that low winter demand influenced its reliance on NTDC supply. The company also highlighted that if it had received its committed natural gas quota, fuel costs could have dropped to Rs 8/kWh—just 40% of the actual cost incurred.
A KE spokesperson stressed that while fuel costs are a key factor, overall power purchase costs—including capacity payments—must be considered. They noted that the total power purchase cost from the national grid is around Rs 27/kWh, making it comparable to KE’s own procurement costs.
Story by Mushtaq Ghumman
