ISLAMABAD: The electricity prices for K-Electric consumers are expected to decrease under the monthly Fuel Charge Adjustment (FCA) mechanism, according to a recent public hearing conducted by the National Electric Power Regulatory Authority (NEPRA) on December 12, 2024.
Relief for Consumers
K-Electric has petitioned for a provisional FCA adjustment for October 2024, proposing a relief of Rs461 million. If approved, this will result in a 27 paisa per unit reduction in customer electricity bills.
NEPRA is expected to announce its decision soon, clarifying the exact FCA amount and the specific month in which the adjustment will be reflected in consumer bills.
How FCAs Work
Fuel Charge Adjustments (FCAs) are applied to electricity bills to account for:
- Variations in global fuel prices.
- Changes in the energy generation mix.
NEPRA ensures rigorous scrutiny and approval of these adjustments before they are passed on to consumers.
K-Electric’s Measures for Cost Optimization
K-Electric has cited several reasons for the proposed reduction in fuel charges, including:
- Reduction in Furnace Oil Usage: A significant cut in reliance on expensive furnace oil for power generation.
- Efficient Utilization of RLNG: Increased use of Re-gasified Liquefied Natural Gas (RLNG) in efficient power plants.
- Enhanced Energy Procurement: Greater energy purchases from CPPA-G (Central Power Purchasing Agency – Guarantee) at lower costs compared to previous months.
Consumer Feedback at NEPRA Hearing
During the NEPRA hearing, Karachi residents and business owners expressed their concerns regarding the high electricity costs and their impact on daily life:
- Economic Impact: Several business owners highlighted that high electricity costs have led to the closure of hundreds of factories, with many more on the brink of shutting down.
- Additional Surcharges: Consumers strongly opposed surcharges aimed at reducing circular debt, deeming them an undue financial burden.
- Privatization Concerns: Participants questioned the effectiveness of K-Electric’s privatization, with many arguing that the utility continues to generate costly electricity despite receiving subsidies.
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One attendee remarked, “What was the purpose of privatization if it hasn’t achieved its goals? K-Electric still produces expensive electricity while benefiting from tariff differential subsidies.”
Broader Concerns
Karachi’s residents have voiced growing dissatisfaction over:
- The rising cost of electricity.
- The imposition of additional charges.
- The lack of transparency and efficiency in K-Electric’s operations.
Some consumers warned that continued financial strain could lead to law-and-order issues within the city.
The Road Ahead
As NEPRA deliberates its final decision, K-Electric faces mounting pressure to address consumer grievances and improve operational efficiency. The proposed FCA relief offers a glimmer of hope for Karachi’s electricity consumers, but broader reforms may be necessary to tackle the city’s long-standing energy challenges effectively.