The National Electric Power Regulatory Authority (NEPRA), on Tuesday, increased electricity rates in Karachi by Rs40 paise per unit as part of the August 2024 fuel price adjustment.
The additional charges will be reflected in the January 2025 bills issued by K-Electric (KE). Furthermore, residents of Karachi will also face an additional increase of Rs. 3.03 per unit in their bills.
KE had earlier requested a reduction of 16 paisa per unit in electricity prices due to fuel cost adjustments (FCA) for September 2024.
During a NEPRA hearing on this request, a member of the public raised concerns, accusing NEPRA of favouritism towards KE and pointing out the discrepancies between KE’s fuel adjustment tariffs and those of the Central Power Purchasing Agency (CPPA-G). These accusations led to a heated discussion, with some claiming that the regulatory process unfairly favoured KE and burdened consumers.
NEPRA responded by inviting the public to a separate review session to address these concerns and said that its decisions are made transparently, with thorough justifications. The regulator clarified that it enforces existing policies rather than creating new ones, ensuring fairness in electricity generation and distribution. They also assured the public that all decisions are made after detailed reviews.
KE officials explained that the rate adjustments are primarily due to changes in the fuel mix, with reduced reliance on furnace oil and increased use of Re-gasified Liquefied Natural Gas (RLNG). They reported that the share of furnace oil-based generation had decreased from 13% to 2%, as the new BQPS-3 unit became operational, allowing them to use more RLNG. KE also confirmed compliance with the Economic Merit Order (EMO) protocols and submitted their latest hourly compliance reports to NEPRA.
The officials mentioned a decline in power demand in Karachi, reflecting national trends, but expressed optimism that demand would grow in the future as the economy improves and borrowing rates fall.
KE compared its requested tariff reduction to the 71 paise per unit relief granted to XWDISCOs and said that their fuel adjustments have generally been lower than the national grids in recent months.
NEPRA also confirmed that KE’s Multi-Year Tariff (MYT) petition for fiscal years 2024 to 2030 is still under review, with data from March 2023 being used for reference pricing. In addition to this, questions about safety incidents in KE’s operational areas during 2022-2023 were addressed. NEPRA clarified that, following investigations, negligence by KE was ruled out in 32 cases, and compensation was provided where necessary.
Unlike other utilities that contested compensation orders in court, KE complied with NEPRA’s rulings. The regulator will soon issue a formal notification detailing the exact timing and amount of the FCA adjustment, providing relief to customers.
Read more: K-Electric consumers to pay higher electricity bills from this month
