Karachiites may get Rs6.62/unit extra relief
ISLAMABAD:
The residents of Karachi might receive an extra Rs6.62 per unit price reduction in their electricity costs following the federal government’s current power bill cut.
NEPRA concluded the hearing on the February 2025 monthly fuel charges adjustment petition which resulted in this announcement. The proposed endorsered plan could generate a total financial benefit worth Rs6.662 billion for K-Electric (KE) consumers. KE advocated for a partial adjustment method to distribute the bill increase during summer when electricity consumption reaches its highest point.
CEO Moonis Alvi of KE explained how international financial sectors require applicants to handle technical assessment expenses during new energy projects funding applications.
According to NEPRA officials who addressed generation tariff queries the standard practice of making capacity payments relies on generation availability. The officials explained that the new structure divides the rates into separate sections to clarify each element.
At the hearing Tanveer Barry the Vice President of Karachi Chamber of Commerce and Industry demanded that NEPRA share operational information on time for stakeholders to offer their input. NEPRA authorities informed the attendees they honored their Service Level Agreements (SLAs) through documentation as proof.
NEPRA explained that the Rs6.62 relief originated from KE itself as separate from the federal tariff reduction programs.
A regulatory authority holds its final judgment until completing the evaluation of material collected from the session.
Industry Voices Concern Over Currency Burden in Power Tariffs
Industrial representatives expressed serious concerns about the recent agreement between independent power generators and end-users regarding bagasse-fired power plants because IPPs can transfer 70% of their currency devaluation expenses to consumers.
The manufacturing representative Rehan Javed criticized the uncertainty of planning production while asking for a multi-year pricing structure to be expedited because it would provide stability for businesses to continue operating.
The participants expressed their dissatisfaction with the rupee depreciation clause because they felt the profitable sugar industry should not pass 70% of exchange rate fluctuations to customers. Under the current amendment the benefit from dollar-to-rupee appreciation will entirely come to consumers while depreciation will trigger yearly consumer costs amounting to 70% of the loss.
The officials at Power Division stated that the new model gives relief since consumers previously paid the complete depreciation impact before.
A different commercial settlement with nine IPPs has been established to reduce consumer utility costs by Rs1 per unit.
As part of their proposal the Power Division wants to review fuel cost calculations starting from October 1, 2021 at Rs4,500/ton but with a 5% annual increase to that base amount. The determination will depend on utilizing a fuel calorific basis of 7,000 BTU/kg.
The Power Division recommended cutting WCC by half for all IPPs except for Shahtaj but made an exception since it does not include WCC in its tariff. Financial terms advise a fixed return on equity (ROE) established at Rs168 per USD with no future indexation of dollar values.
The O&M costs for local operations will be adjusted to the minimum value between 5% annual increase and previous national inflation rate. The supply of electricity to bulk power users by bagasse IPPs requires necessary licence modifications as well as reimbursement for diverted units to CPPA-G.
According to the petition the insurance coverage for Chiniot Power Ltd. should be limited to 0.7% of EPC cost along with an O&M benchmark reduction of 10% which would align its standards with other producers.
Apart from Shahtaj all bagasse IPPs will have their cost-sharing model adjusted for the net annual plant factor through the revised petition.
