Electricity rates may drop by Rs4.84 per unit for Karachiites

KARACHI: Electricity rates for K-Electric consumers may decrease by Rs4.84 per unit under the fuel price adjustment mechanism as the National Electric Power Regulatory Authority (Nepra) have completed the hearing on the company’s request and reserved its decision.

K-Electric had submitted a provisional request for its January 2025 monthly fuel charge adjustment (FCA), proposing a reduction of Rs4.84 per kilowatt-hour (kWh) for its customers.

If approved, consumers would receive relief amounting to Rs4.69 billion. 

During the hearing, K-Electric officials informed the authority that the reduction in electricity prices was due to power purchases from National Transmission and Despatch Company (NTDC) and Central Power Purchasing Agency (CPPA), while no electricity was generated from furnace oil in the previous month. 

Nepra member Rafiq Ahmed Sheikh questioned the eight percent annual decline in power consumption, to which K-Electric officials attributed the decrease to lower temperatures, economic challenges affecting industrial consumption, and increased use of solar panels. 

Nepra directed K-Electric to submit a detailed report within a week regarding the reasons behind the decline in electricity consumption.

Additionally, all distribution companies (DISCOs) have been asked to provide details of interest earned on net metering consumers’ funds. 

Following the public hearing, Nepra reserved its decision, which will be announced later. 

A K-Electric spokesperson had earlier stated that this was the fifth consecutive reduction under the fuel charge adjustment mechanism, ensuring benefits for consumers.

Previous adjustments saw minor reductions, including 0.18 paisa in September 2024, 0.49 paisa in October 2024, Rs1.23 in November 2024, and Rs3.0 in December 2024.

Fuel charge adjustments are driven by fluctuations in global fuel prices and the evolving energy mix used in electricity generation. When fuel prices increase, the additional cost is passed on to consumers through higher electricity bills. Conversely, when prices decline, customers benefit from lower FCAs.