KE agrees to share FCAs projections with regulator

ISLAMABAD: K-Electric has agreed to share provisional projections of Fuel Charges Adjustments (FCAs) for future months’ subject to final adjustment, aimed at facilitating the exporters/businessmen to assume their FCAs cost in their products.

This was assured by KE CEO Syed Moonis Abdullah Alvi, at a public hearing on KE’s FCA adjustment for the month of February 2025. The KE has sought negative adjustment of Rs 6.62 per unit in FCA to refund Rs 6.662 billion to its consumers but at the same time it has requested recovery of Rs 4 billion from consumers out of Rs 13.9 billion, out of which Rs 9.4 billion has already been adjusted.

Chairman of the Authority, Waseem Mukhtar presided over the hearing. KE’s team including CFO, Aamir Ghaziani and Director Finance, Ayaz Jaffar Khan shared information about the power utility company.

During the hearing, Member (Technical), Rafique Ahmad Shaikh stated that business community/manufactures usually demand projections of FCA so that they can include the cost in their manufacturing/business costs to avoid losses.

He asked why KE is not sharing/displaying FCAs cost to facilitate the businessmen. KE’s Director Finance stated that the power utility can formulate projections of FCA once its final tariff is out.

And CEO KE assured the Authority that the power utility company would share its projections with the Authority and also display it on its website but it would be on provisional basis and subject to adjustment on the basis of actual tariff.

Member (Technical), Arif Bilwani, Rehan Jawed from KATI and Tanveer Barry from KCCI also raised some technical questions which the KE’s team present in the Nepra Hall and its head office responded to.

On the issue of accumulated actualization of fuel cost KE highlighted that pursuant to determination of generation tariff of power plants of KE for the period post June 2023, it has submitted the required partial load, open cycle and degradation curves along with Startup Cost for approval.

Relevant extract of decision is as follows “10.12. Regarding degradation and part load, the Authority has decided to consider it separately. KE shall be required to submit endorsement from Independent Engineer on all curves, clearly indicating/addressing Operating Hours/Fired hours and other technical queries, if any. In line with the previous decision of the Authority, no further degradation shall be applicable in case of BQPS-I and 11.2. The submissions of the Petitioner have been examined. With respect to Black Start and Startup Charges, KE shall be required to submit endorsement/evaluation from 3rd party/independent engineer preferably the one who carried out the test and the issue shall be decided separately along with part load and degradation.

In line with the all other power plants, shutdown charges have not been considered.”

An amount of Rs 13.9 billion from July 2023 to February 2025 is accordingly pending for adjustment out of which the Authority has set aside PKR 9.4 billion in KE’s FCA Decision for November 2024 to January 2025. Of this amount, Rs 9.4 billion has already been recovered from consumers.

KE requested the Authority to also consider adjustment of aforementioned accumulated actualization of fuel cost so that the recovery can be made from the negative fuel cost variation to ensure consumers are not burdened at a later stage.

In February 2025, KE received 822 GWh from National Grid out of total sent out of 1,007 GWh, which was 82 per cent.

In reply to a question, Director Finance KE noted that the units sold in February 2025 were 2 per cent less compared to same month of 2024 whereas 4 per cent growth was witnessed compared to January 2025. Overall, KE sale was almost the same during the first eight months of current fiscal year as in the corresponding period of 2024-25.

Arif Bilwani complained that his review petition on KE’s tariff was rejected on technical grounds without considering its contents. He threatened that he would not participate in the public hearings of NEPRA in future if the Regulator did not give proper consideration to his submissions.

Responding to Arif Bilwani, Nepra official stated that though the review petition has been dismissed on technical grounds but his points will be made part of the decision of tariff petition of KE when it will be reheard by the Authority.

Tanveer Barry representative of KCCI said KE adjustment of actual fuel cost based on partial load, open cycle operations, and degradation curves is not adequately justified in the current submission. The arguments are qualitative, lack quantitative and documentary backing, and contravene Nepra’s standard benchmark-based disallowance criteria.

Regarding incremental package, Barry said incremental package has been passed on to all in Pakistan except Karachi because KE got a stay order. And while the maximum amount is to be paid by the federal government but Power Division and Nepra are delaying verifying the calculation to be paid by government of Pakistan.—MUSHTAQ GHUMMAN