K-Electric’s exclusivity will end next year

K-Electric in its petition for FCA requested for an increase of PKR 5.27 per unit on account of fuel consumption in the month of March 2022. After commentators from Karachi raised serious questions on power utility’s performance, K-Electric’s exclusivity will end next year, the views has been shared by National Electric Power Regulatory Authority (Nepra). During a public hearing on KE’s FCA adjustment of Rs 5.275 per unit for March 2022 with an indicated approval of Rs 4.83 per unit after making an adjustment of Re 0.43 per unit on account of CPPA-G as per proposed FCA for Discos and generation of BQPS-III.  KE will recover Rs 7.870 billion in the bills of June 2022. The impact of mix variance was Rs 4.467 billion whereas impact of price variance was Rs 4.126 billion. This increase will be adjusted against relief package of Rs 5 per unit announced by the previous government.The Nepra authority comprised Chairman Tauseef H Farooqi, Vice Chairman Rafique Ahmad Shaikh and Member KP, Engineer Maqsood Anwar Khan who officiated the hearing, whereas Aamir Ghaziani, CFO KE and Ayaz Jaffar Ahmed, Director Finance KE represented the power utility. During the hearing, a number of questions were raised by the commentators, Hafiz Naeemur Rehman of Jamaat-e-Islami, Arif Bilwani, Tanveer Barry and Aneel Mumtaz.  During the hearing, it was also revaled that KE had billed electricity generated from Bin Qasim Power Station-III (BQPS-III), which was in the testing phase at a rate of Rs 141 per unit. As KE should rely more on electricity from national grid rather than its own expensive electricity, the power utility should be independent in generation but at the same time its prices must be lower. The country’s power generation scheme also came under discussion. There was a consensus that indigenous resource based generation is only feasible option which includes, hydel, solar, wind and local coal.