Negative adjustment of Rs6.69 billion approved for K-Electric

WEB DESK: The National Electric Power Regulatory Authority (Nepra) has sanctioned a negative adjustment of Rs6.690 billion for K-Electric (KE) for the quarter spanning April to June 2023.

According to Business Recorder, this adjustment, approved under the Quarterly Tariff Adjustment (QTA) mechanism, will be incorporated into the new Multi-Year Tariff (MYT) framework covering the period from 2023-24 to FY 2029-30.

A hearing concerning KE’s Quarterly Adjustment request was held by Nepra on October 19, 2023. The authority noted that KE’s claim for write-offs necessitates further review and analysis.

In its recent decision, Nepra approved a Rs52 billion QTA for Distribution Companies (Discos) and KE. However, KE’s claim for write-offs amounting to Rs16.264 billion, which includes amounts previously factored into the tariff, was not included in the current adjustment.

Additionally, the Rs3.093 billion already incorporated into the tariff has been deducted from the current calculations. The authority plans to address these write-offs in a separate review.

On August 4, 2023, KE submitted a request for a quarterly adjustment for April-June 2023, seeking a positive adjustment of Rs3.217 per kWh.

KE based this request on provisional calculations of price resets and indexation for June 2023, according to the MYT mechanism, and asked for provisional approval to apply from July 2023, pending final tariff determination for the next control period.

Further, in a letter dated October 9, 2023, KE indicated that its write-off claims for FY 2023 had been verified by auditors. KE also requested adjustments at the end of the term in accordance with the MYT determination of July 5, 2018, and the Mid-term Review (MTR) determination of March 1, 2022.

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