K-Electric proposes Rs10.69 per unit increase in base tariff

KARACHI: K-Electric, the primary electricity provider for Karachi, has submitted a petition seeking a Rs10.69 per unit increase in its base tariff.

The proposed increase would raise the tariff to Rs44.69 per unit from the current Rs34 per unit under the Multi-Year Tariff (MYT) mechanism for the period from FY 2023-24 to FY 2029-30.

In the tariff petition submitted to the National Electric Power Regulatory Authority (Nepra), KE has detailed the adjustments required in various components, including:

1. Cost of power (Energy Purchase Price – EPP component): Rs18.88 per unit
2. Cost of power (Capacity Purchase Price – CPP component): Rs12.54 per unit
3. Transmission charges: Rs3.48 per unit
4. Distribution charge: Rs3.84 per unit
5. Operation and Maintenance (O&M): Rs0.42 per unit
6. Retail margin: Rs0.59 per unit
7. Recovery loss allowance: Rs2.88 per unit
8. Working capital: Rs2.07 per unit

According to Business Recorder, Nepra has issued a notice inviting stakeholders to express their opinions on the proposed tariff hike within seven days.

According to KE’s detailed submission to Nepra, the power utility company estimates a reference cost of power at Rs502.709 billion, translating to Rs26.94 per kWh based on the expected sent out units for FY 2024, the estimated generation mix, and the tariffs requested for KE plants from FY 2024 onwards.

With the requested distribution losses, the power purchase price (PPP) per unit billed is estimated at Rs31.41 per kWh.

For the purpose of the reference tariff, KE projects that the units served for FY 2024 will be 18,660 GWh, with transmission charges amounting to Rs55.738 billion based on a base tariff for transmission of Rs2.99 per kWh, as requested in KE’s Transmission petition for FY 2024—FY 2030.

These charges will be adjusted according to the mechanism proposed in the petition.

Distribution charges will be passed through based on the units billed and the tariff approved by Nepra.

KE estimates that for FY 2024, the units billed will be 16,004 GWh, and distribution charges will amount to Rs61.385 billion, based on a base tariff for distribution of Rs3.84 per kWh as requested in KE’s

Distribution petition for FY 2024—FY 2030. These charges will also be adjusted according to the proposed mechanism in the Distribution petition.

The proposed tariff increase aims to cover the rising costs associated with power generation, transmission, and distribution, ensuring the reliability and sustainability of electricity supply to Karachi’s residents and businesses.

Read next: Petrol price to go down by Rs4.5 per litre