MM News

KARACHI: National Electric and Power Regulatory Authority (Nepra) approved on Monday a massive quarterly fuel cost adjustment (FCA) of Rs12.68 per unit for K-Electric consumers.

The move is set to affect consumers in Karachi because of uniform tariff policy of the federal government under which same power rates are applied across the country for consumers of all distribution companies, including KE.

However, officials privy to the subject claim that the federal government was expected to take the additional financial hit through differential tariff subsidies paid out of the budget to maintain uniform rates for all distribution companies.

According to a notification issued by the NEPRA, the fourth quarter adjustment of K Electric for the financial year 2021-22 has been approved. An increase of Rs14.53 per unit was requested for the fourth quarter adjustment. According to the notification, the NEPRA authority held a hearing on the quarterly adjustment on August 31. After examining the data, the authority issued a decision regarding the adjustment.

In the detailed decision, Nepra said that negative FCA will not to be passed on to lifeline consumers, residential consumers who consume up-to 300 units and agriculture consumers. Similarly, positive FCA would not be passed on to the life-line consumers and the difference will be adjusted quarterly.

It is pertinent to mention here that under the tariff mechanism, quarterly tariff adjustment (QTAs) are made on account of variations in the power purchase price, capacity charges, variable operation and maintenance costs, and use of system charges, including the impact transmission and distribution losses, which are built into the base tariff by the federal government.