KE confused about reimbursement of cost incurred?

ISLAMABAD: Karachi Electric (KE) is reportedly confused about reimbursement/ compensation mechanism of cost incurred on deferred recovery of electricity bills from consumers.

“We understand that the electricity bills for domestic consumers(single phase) having consumption up to 300 units for each of the months of March, April and May 2020 is to be divided in three installments and would be recovered up to November 2020,” said Aamir Ghaziani, CFO KE in a letter to the Power Division.

Further, “within the relief package announced by the Prime Minister, as communicated in the Power Division’s letter of March 26, 2020, private domestic consumers (single phase) having consumption up to 300 units can pay total amount of their bill, if they so desire. Hence, in case a consumer pays total bill for March 2020, he would be charged first installments for April in April. Similarly, if a consumer pays total bill for March and April, he would be charged first installments for May in May.

”Accordingly, the bills to consumers will be sent with the option to pay in full or in installments as per the mechanism. Furthermore, KE has requested Power Division to clarify in writing as well, mechanism regarding reimbursement/compensation of cost incurred on deferred recovery of electricity bills from the consumers,” the letter states. Last month, the ECC decided that the recommended quarterly adjustment to the tune of Rs 4.87 per unit being the differential between the schedule of tariff recommended by Nepra for April-June 2019 and schedule of tariff earlier recommended by Nepra and reflected in the KE notified tariff, be notified for each category of consumer, to the extent of bringing K-Electric consumers and tariff as par with what is currently in filed for consumer of Discos(increase in rate of Rs 1.09 to Rs 2.89/kWh for various categories of consumers). Any difference between the two rates be made available by way of subsidy which shall amount to Rs 26 billion only. KE submitted its petition of monthly and quarterly adjustment on May 27, 2019 for Power Purchase Price (PPP) indexation of O&M costs, and adjustment of T&D losses etc for eleven quarters from July 2016 to March 2019.

At a recent Cabinet meeting, Prime Minister enquired about the impact on consumers of Karachi as a result of quarterly adjustments being allowed to K-Electric. Minister for Power informed that increase of Rs 1.09 to Rs 2.89 was being allowed to bring it at par with what was currently in the field for consumers of other Discos and that too would be effective after three months, ie, June, 2020.—MUSHTAQ GHUMMAN