While electricity prices are expected to fall following the revised IPP agreements, consumers in Karachi are also expected to see a drop in unit electricity tariffs.
The National Electric Power Regulatory Authority (NEPRA) held a hearing regarding KE Electric’s monthly fuel adjustment application for November. The company had asked for a reduction of Rs 4.98 per unit.
During the hearing, NEPRA member Maqsood Anwar noted that KE Electric’s heavy reliance on NTDC (National Transmission and Dispatch Company) raises the question of whether KE Electric should see itself grant a production license itself.
Officials representing KE Electric said the company’s power plants enjoy a capacity payment of Rs 6-7 per unit and the demand for electricity has been growing at 13% annually, with a significant increase in the demand from the national sector.
NEPRA Member Rafiq Sheikh asked about the projected growth over the next 5-6 years, taking into account solar power and other alternative energy sources. In response, KE Electric officials said the move to captive plants would help increase growth.
During the hearing, KE Electric officials provided a briefing revealing that in November, they purchased 62% of their electricity from NTDC, which was comparatively cheaper. The rest of the electricity was produced from LNG (21%) and fuel oil (13%).
Average demand in November was 2,300 MW, lower than October’s 2,600 MW, representing a 12% reduction in electricity demand compared to October.
Compared to the same period last year, demand increased, with demand in November of the previous year amounting to 2,000 MW.
Following the public hearing on KE Electric’s monthly fuel charge adjustment, NEPRA confirmed that the company had requested a reduction of Rs 4.98 per unit. This follows a previous adjustment in October, where a reduction of Rs 0.49 per unit was implemented.
According to KE Electric officials, the November fuel charge adjustment will be Rs 4.49 less per unit compared to October. This discount will apply to all KE Electric customers except lifeline consumers, those using up to 300 units per month, prepaid users, agricultural customers and electric vehicle charging stations .
NEPRA will issue a detailed decision after further review of the data.
