ISLAMABAD: K-Electric on Thursday requested the National Electric Power Regulatory Authority (Nepra) to announce determination of its generation tariff pending since December 2022.
“It has been more than 22 months (almost 2 years) from the date generation tariff petitions were filed (in Dec 2022) and determination is still awaited. We once again reiterate that delays in finalization of tariff petitions is adversely impacting KE’s ability to raise financing for execution of investment plan as well as finalisation of financial statements in line with statutory timelines.
KE is a listed Company and has to issue its quarterly and annual financial statements as per the timelines given in the Companies Act. To date KE is unable to issue any quarterly and annual accounts for FY2024 for which SECP has also raised concerns,“ said CFO KE, Aamir Ghaziani during a public hearing on FCA for August 2024 in NEPRA, in which KE has sought Rs 0.51 per unit positive adjustment provisionally to recover additional amount of Rs 853 million. He said KE has faced a financial loss of Rs 30 billion due to delay in tariff determination.
Insiders claim that new generation tariff and benchmarks for under the MYT mechanism for 2023-29 have ignited conflict within the NEPRA Authority which is the main reason for the delay in the announcement of the determination.
Mathar Niaz Rana, Member (Tariff and Finance), rejected several recommendations from his colleagues, voicing concerns that various components of KE’s current generation tariff could lead to increased consumer rates and may not adhere to prudent cost practices.
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During the hearing, Tanveer Barry representative from Karachi Chamber said Discos’ FCA is negative whereas KE FCA is positive because of some inefficient plants of KE. He demanded that annual heat tests for KE’s plants must be ensured.
He further contended that industrial consumption is going down because of expensive electricity, adding that inefficient plants should be shut down and KE should purchase more electricity from CPPA-G.
KE CFO Aamir Ghaziani further said post-privatization, all new power plants added into KE’s fleet were among the most efficient at their time of installation, and still had a significant useful operational life ahead of them.
KKI and Dhabeji interconnections, which were completed in record time, are in the final stages of commissioning and will soon induct additional affordable electricity from the National Grid towards Karachi.
He further added that KE has the capability to seamlessly supply electricity to additional industries, and is providing uninterrupted power to existing industries as well. If we were to receive 200 MMCFD of indigenous gas, the benefit will be passed on to consumers in the form of lower tariffs.
He further shared that if cheaper indigenous gas is supplied to KE, the subsidy paid to customers by the government could be substantially reduced. KE has no contribution to circular debt post-privatization and its losses are borne by investors.
Copyright media, 2024
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