KE wants no change in tariff until 2026

Author: By Abrar Hamza

KARACHI: The Karachi Electric (KE) has submitted a multiyear tariff petition with the National Electric Power Regulatory Authority (NEPRA) requesting to extend the applicability period of existing tariff until June 30, 2026 along with some modifications and adjustments.

The KE has sought an increase of Rs 0.66/kWh in operation and maintenance (O&M) component of the existing tariff. The KE has also sought to change in clawback formula thresholds from 12%, 15% and 18% to 15%, 18% and 20%.

“In the existing tariff adjustments, the level of ‘X’ factor in the O&M cost adjustment formula should be lower of the current levels or 30% of increase in Consumer Price Index (CPI),” the power utility company requested.

Furthermore, the power utility has requested in its application to NEPRA that in existing tariff, a working capital component be included to cover late payments by government entities and government of Pakistan in respect of tariff differential subsidy (TDS) claims due to circular debt.

“Customers are much better placed if the utility continues to operate in an integrated manner. It will (a) attract the appropriate level of investment across the value chain and hence result in an improved quality of service; and (b) result in lower tariffs for the customers,” said the KE.

The KE seeks a continuation of the structure of the I-MYT for a control period of 10 years as “it meets the objectives of the business plan”.

It has also requested to include a force majeure clause for the allowance of irrecoverable costs or lost revenue from business disruption in case of a force majeure event.

In this regard, the NEPRA has notified to all stakeholders stating that any interested person who desires to participate in the proceedings may file an intervention by July 10.

Reasoning the submission of a multiyear tariff petition, the K-Electric said, “The structure of the current I -MYT tariff has worked well as the I-MYT is a performance-based price control. It allows uncontrollable costs to be passed through into tariffs, while controllable costs are subject to CPI-X price regulation.”

The tariff structure provides incentives for KE to make investments in new capacity and to improve the operational efficiency of its existing generation, transmission and distribution assets without having any guaranteed returns.

The company said that the customers would benefit from these investments, in terms of increased supply, network resilience, and lower customer tariffs in real terms.

“Increased electricity supply and network resilience also has a positive impact on economic activities, resulting in improved gross domestic product (GDP) and employment in Pakistan,” it added.

Share
Leave a Comment

Recent Posts

  • Technology

Pakistan Tech Destination Showcases at Web Summit Lisbon 2024, Elevating Pakistan’s Global Tech Image with PSEB’s Support

LISBON, Nov 11 – This week, Pakistan is making a significant mark at Web Summit…

9 hours ago
  • Pakistan

IMF urges Pakistan to cut spending or introduce a mini-budget

Finance Minister Mohammad Aurangzeb has commenced talks with the International Monetary Fund (IMF), which is…

12 hours ago
  • Top Stories

ICC likely to face financial loss as Pakistan mull boycotting matches with India

After India declined to travel to Pakistan for the 2025 Champions Trophy, Islamabad has decided…

12 hours ago
  • Lifestyle

Taylor Swift wins big and Rita Ora pays tribute to Liam Payne at MTV EMAs 2024

Taylor Swift came out on top at the 2024 MTV EMAs on Sunday, walking away…

13 hours ago
  • Lifestyle

Saudi Arabia’s cultural riches shine at Lok Mela 2024

The annual Lok Mela at Lok Virsa is underway, showcasing diverse cultural heritages from across…

13 hours ago
  • Lifestyle

Will and Jada step out for dinner in rare public appearance

Will Smith and Jada Pinkett Smith remain united. The estranged couple, who married in 1997…

13 hours ago