Thursday, January 27, 2022

NEPRA to Conduct Public Hearing for K-Electric’s Petition on Monthly & Quarterly Fuel Adjustment Charges Today


Zain Zubair
Zain Zubair is a staff writer for World News Observer. He is studying ACCA in Pakistan. Besides Accountancy and writing pieces, he loves cooking and nature photography. Zain has attended various modern journalism workshops. Contact: [email protected]

NEPRA will conduct a public hearing today to discuss the petition submitted by K-Electric on Fuel Adjustment Charges (FCA) for the month of November 2021 and Quarterly Adjustments for the period July till September 2021.

The request made by the utility are in line 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 adjustments.

Fuel Charge Adjustment (FCA) is incurred by utilities due to global variations in fuel prices used to generate electricity. Across Pakistan, these costs are passed through to the consumers following NEPRA’s scrutiny and approval. Consumers also receive a benefit when the cost of fuel decreases. In both scenarios, there is no impact on KE’s profitability as these are simply operational expenses being recovered.

For the month of November, KE has requested for Fuel Charges Adjustment with an average impact on consumers of 31 paisa per unit, however, the final decision will be made by NEPRA after scrutiny with instruction on the period during which these costs can be applied to consumer bills.

KE also requested Quarterly adjustments for the period July till September 2021 with an estimated impact of 5.182 rupees per unit. This increase in September 2021 was necessitated due to an increase in fuel prices in September 2021 by 61% (RLNG) and 28% (Furnace oil). However, with the Government of Pakistan’s policy of Uniform Consumer Tariff across the country, this variation is not likely to impact consumers.

These hearings are part of a regular process, whereby the regulatory authority scrutinizes the adjustment requests based on the facts and figures. State-owned DISCOs are usually heard in one sitting while K-Electric’s hearings are conducted separately.

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