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Business Recorder
a day ago
- Business
- Business Recorder
Karachi bearing brunt as ministry looks to block FCA relief yet again
The National Electric Power Regulatory Authority (NEPRA) concluded its public hearing on K-Electric's (KE) petition for the approval of its April 2025 Fuel Charges Adjustment (FCA) to pass on a relief of over PKR 7 billion to Karachi's consumers. The hearing, which was originally deferred at the behest of the Power Division, covered the legal aspect of the Ministry of Energy's (MoE) request to defer the decision on KE's April FCA in light of their pending submission to the Cabinet – requesting application of uniform FCA across the country. The Power Division sought another deferral – submitted on June 27, 2025 – which NEPRA declined and decided to hear KE's case in the public forum. The MoE highlighted that based on its submission to the Cabinet on approving application of uniform FCA across the country, NEPRA should withhold and defer the decision until the Cabinet's decision. They argued that the discrepancy between KE's relief of PKR 4.69 to consumers conflicts with the XWDISCO of PKR 0.93 and would strain the federal budget. Their argument claimed that just as the Quarterly Tariff Adjustment (QTA) is applied uniformly across Pakistan, the FCA should follow the same principle. NEPRA's said the legal stance highlighted that the FCA mechanism is clearly defined in the law, and any unwarranted delays would not be legally sustainable. Moreover, retrospective applications of FCA would be legally indefensible and would likely face legal challenges. NEPRA also highlighted that the MoE's inability to raise this issue earlier or explicitly ask for a stay order in their review of the recently approved Multi-Year Tariff for KE, has put them in a difficult position to justify any delayed decision. Karachi's industrialists echoed this concern, urging NEPRA to remain independent and resist any pressure from the Ministry. They pointed out that the Ministry never objected when Karachi used to pay for positive FCAs in the past, which increased the applicable electricity price while customers of DISCOs enjoyed relief through negative FCAs. Citing a decision from IMF's May 2025 brief, Rehan Javed – a prominent industrialist – shared that IMF instructions specifically required Pakistan to implement timely adjustments in the power sector to manage the country's circular debt. Delays in FCA decisions, whether positive or negative would risk undermining this objective. Echoing similar sentiments, Tanveer Barry, Karachi Chamber of Commerce representative, and Arif Bilvani, prominent industrialist, highlighted what they termed the continued economic discrimination against Karachi. They questioned why Karachi consumers are forced to pay the Power Holding Limited (PHL) surcharge of Rs3.23 per unit of electricity despite contributing nothing to the circular debt for the next six years. They argued that Karachi consumers should now fully benefit from the negative FCA instead of being selectively targeted. They also raised concerns about the government's selective application of the 'Apna Meter, Apni Reading' program, which has not been extended to Karachi. Concluding the session, Amina Ahmed, Member (Law), summarizing the frustration of many, questioned why the Ministry's sudden urgency should override a process that has been place for nearly two years – in reference to KE's reference fuel cost of PKR 15.99. 'Its like the ministry has woken from its slumber,' she remarked. She also mentioned the absence of clear FCA guidelines – similar to QTA guidelines - and asked if it is imprudent to put Karachi's consumers on hold on the basis of an already delayed Cabinet approval – which may or may not implement a uniform FCA regime. Speaking during the hearing, Moonis Alvi, CEO KE, shared that they trust NEPRA's process in upholding fairness in whatever decision they may pass and that KE will abide by the decision notified as per the Authority.
Express Tribune
25-06-2025
- Business
- Express Tribune
NEPRA considers 10 paisa power tariff hike for May
Listen to article Power consumers across Pakistan, excluding K-Electric (KE) and lifeline users, may face a 10-paisa per unit increase in electricity tariffs under the Fuel Charges Adjustment (FCA) for May 2025. The National Electric Power Regulatory Authority (NEPRA) is scheduled to hear the proposed hike of Rs0.1015 per kilowatt-hour (kWh) on June 30, 2025, at NEPRA Tower, Islamabad. The session will also be available online via Zoom. The proposal has been submitted by the Central Power Purchasing Agency Guarantee Limited (CPPA-G) on behalf of Ex-WAPDA Distribution Companies (XWDISCOs). According to CPPA-G, the actual fuel cost in May stood at Rs7.4940/kWh, compared to a reference cost of Rs7.3925/kWh, resulting in the requested hike. In May, 12,755 GWh of electricity was generated at a cost of Rs99.153 billion, averaging Rs7.7739/kWh. After deducting transmission losses of 355 GWh (2.78%) and adjustments, 12,367 GWh was delivered to DISCOs at Rs92.676 billion or Rs7.4940/kWh. Hydel power led the generation mix with 37.98% (4,844 GWh), followed by RLNG (16.99%), nuclear (15.77%), and local coal (11.08%). Imported coal contributed 6.24%, while gas added 6.92%. Other sources included RFO, solar, wind, and bagasse. NEPRA has invited stakeholders to join the hearing and submit feedback. If approved, the FCA will apply for one month only.
Business Recorder
25-06-2025
- Business
- Business Recorder
May FCA: Positive adjustment of Re0.1 per unit sought
ISLAMABAD: Power Division has sought a positive adjustment of Paisa 10 per unit in electricity tariffs for May 2025 to recover Rs 1.255 billion under the monthly Fuel Charges Adjustment (FCA) mechanism for consumers of Distribution Companies (Discos). National Electric Power Regulatory Authority (Nepra) will hold a public hearing on CPPA-G's request on June 29, 2025. According to data submitted to Nepra, total electricity generation in May 2025 stood at 12,367 GWh— an increase of 0.8 percent compared to 12,267 GWh in May 2024. PD blocks Rs4.69/unit FCA relief The overall basket price of electricity during May 2025 was Rs 7.4940 per unit, with the total cost of generation recorded at Rs 96.676 billion. According to data submitted to Nepra, in May 2025, hydel generation recorded an increase of 24 per cent to 4,844 GWh as compared to 3,906 Gwh in May 2024. The share of hydel generation was 37 per cent in total generation. Power generation from local coal-fired power plants was 1,413 GWh in May 2025 which was 11.08 percent of total generation at a price of Rs 16.8 per unit against 1,372 GWh in May 2024. It shows an increase of 3 per cent in local coal generation. Generation of 796 GWh was generated from imported coal at Rs 16.8 per unit (6.24 percent) against only 383 GWh in May 2024, showing an increase of 108 per cent. Generation from RFO stood at 20 Gwh in May 2025 as compared to 62 Gwh in May 2024, negative 68 per cent at a rate of Rs 28.5993 per unit. Electricity generation from gas-based power plants was 833 GWh (6.92 percent) at Rs 12.8104 per unit against 1,110 Gwh in May 2024(20 per cent reduction). Generation from RLNG was 2,168 GWh (17 percent of total generation) at Rs 23.7349 per unit. Electricity generation from nuclear sources was 2,012 GWh at Rs 2.2467 per unit (15.77 percent of total generation) against 2,360 GWh in May 2024 showing a decrease of 15 per cent and electricity imported from Iran was 36 GWh at Rs 2.5155 per unit. Power generation from baggasse recorded 34 GWh at a price calculated at Rs 5.9810 per unit. The energy generated from wind was recorded at 433 GWh, 3.39 percent of total generation and solar at 116 GWh, 0.91 percent of total generation in May 2025. The total energy generated was 12, 755 GWh, against 12,617 GWh in May 2024, showing an increase of 1.2 per cent at a basket price of Rs 7.7739 per unit. Copyright Business Recorder, 2025
Business Recorder
24-06-2025
- Business
- Business Recorder
PD blocks Rs4.69/unit FCA relief
ISLAMABAD: In a surprise move, the Power Division on Monday blocked a proposed Rs 4.69 per unit relief in Fuel Charges Adjustment (FCA) for K-Electric (KE) consumers for April 2025, citing a new government policy aimed at uniform FCA application across all electricity consumers nationwide. The development came during a public hearing held by the National Electric Power Regulatory Authority (NEPRA), chaired by its Chairman Waseem Mukhtar. The hearing was convened to consider KE's request for provisional FCA relief for April 2025. During the proceedings, Additional Secretary (Power Finance) Mehfooz Bhatti—accompanied by CPPA-G representative Naveed Qaiser—requested NEPRA to defer the FCA determination until the federal government's review motion on KE's Multi-Year Tariff (MYT) determination is decided. However, Bhatti did not provide any supporting financial or technical data to justify the request. March FCA: KE seeks Rs5.02 interim negative adjustment The Power Division formally submitted a letter dated June 23, 2025 to NEPRA seeking the deferment, but the letter was not made public. 'We are under an IMF program, and consumers are being burdened,' Bhatti stated. A NEPRA official rebutted the claim, clarifying that FCA is a pass-through item, which does not impose a direct fiscal burden on the government—unlike the Quarterly Tariff Adjustment (QTA). Chairman NEPRA Waseem Mukhtar expressed strong reservations over the Power Division's approach, stating that such a move compromises regulatory transparency and public trust. He questioned whether the request came directly from the federal government or the Power Division. Bhatti clarified that it was the Power Division's initiative, and that formal cabinet approval was still pending. NEPRA Member Legal, Amina Ahmed, further challenged the justification of the deferment and inquired whether CPPA-G would continue subsidizing KE. Qaiser responded that an agreement exists between CPPA-G and KE for the subsidy. To this, Member Ahmed sarcastically noted, 'You also have agreements with others,' hinting at broader inconsistencies in policy enforcement. Chairman Mukhtar underscored that as a public hearing, the process must be transparent and not conducted 'in the dark.' He raised concerns about the long delay associated with the federal review motion, questioning if the FCA for KE would remain unresolved for as long as six months, and how such a substantial negative adjustment would be managed in the interim. Qaiser initially suggested that since a positive FCA of paisa 10 per unit was being charged to DISCO consumers for April, the same adjustment could be applied to KE customers. However, he immediately retracted the suggestion when the Chairman pointed out the contradiction in passing on positive adjustments while withholding negative ones. Qaiser also claimed that a new FCA mechanism summary had been sent by the Power Division to NEPRA. This was contradicted by NEPRA's Mubashar Bhatti, who clarified that NEPRA had only commented on an earlier summary, and no new document had been received. KE CEO Syed Moonis Abdullah Alvi said KE would comply with NEPRA's decision but voiced concern over the abrupt policy shift. 'In the past, KE consumers paid higher FCAs compared to the rest of the country. No one advocated uniformity then,' Alvi said. 'Now that FCA is lower for Karachi, withholding the relief is not only unfair but also undermines confidence in regulatory fairness,' he added. He emphasized that industries and consumers in Karachi were expecting the relief and deserved equal treatment. Following internal deliberations, Chairman Mukhtar announced that NEPRA would reschedule the hearing for next week to allow further examination of the issues raised. In its written communication, the Power Division referred to NEPRA's June 18, 2025 public notice announcing the June 23, 2025 hearing on KE's request for a provisional FCA for April 2025. KE had sought a negative FCA of Rs 4.69/kWh, amounting to Rs 7.173 billion in consumer relief. By contrast, consumers of state-run DISCOs were charged a positive FCA of Rs 0.9306/kWh for the same month, as per NEPRA's June 5, 2025 determination, notified via SRO 1046(I)/2025. The Power Division argued that this significant discrepancy stems from KE's higher reference fuel cost of Rs 15.9947/kWh—provisionally allowed under NEPRA's May 27, 2025 MYT determination covering FY 2023-24 to FY 2029-30. It pointed out that the reference was originally established during the January–March 2023 quarter of the previous MYT and has continued to be used despite the passage of two years. Highlighting the potential implications of this outdated reference, the Power Division stated that both it and CPPA-G have filed review motions to seek a re-determination of the FCA references under the applicable regulatory framework. Proceeding with the FCA decision based on these disputed provisional values, the Division warned, could lead to regulatory inconsistencies, retrospective adjustments, and unequal consumer treatment. 'This could contravene the principles of fairness, transparency, and due process laid out in the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 and the NEPRA Tariff (Standards and Procedure) Rules, 1998,' the letter added. The Power Division urged NEPRA to defer KE's FCA decision for April 2025 until the motions are decided and new FCA reference values are formally adopted. The Division said the request was being made in the interest of regulatory consistency, consumer equity, and to prevent premature or potentially unjustified adjustments. NEPRA is now expected to revisit the matter in its next scheduled hearing. Copyright Business Recorder, 2025
Business Recorder
06-06-2025
- Business
- Business Recorder
March 2025: Nepra allows Rs3 negative adjustment for KE consumers
ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) has allowed negative adjustment of Rs 3 per unit for KE consumers for March 2025 and Rs 0.93 per unit positive adjustment for Discos consumers for April 2025 under monthly Fuel Charges Adjustment (FCA) mechanism. In this regard, NEPRA has issued separate notifications, according to which KE's negative adjustment and Discos positive adjustment will be effective in bills of June 2025. For Discos, NEPRA conducted a public hearing on May 29, 2025 for Discos and on on May 22, 2025 for K-Electric which was attended by representatives of industry and media. March FCA: KE seeks Rs5.02 interim negative adjustment According to determinations of Discos, Amir Sheikh, a commentator, submitted that this positive FCA has lowered the previously announced benefit of around Rs.7.7/kWh adversely impacting cost projections for many industrial consumers. He also questioned the dispatch of RLNG-based power plants despite the purported availability of local natural gas and pointed out that alternative suppliers, such as Mari Petroleum, may offer more cost-effective solutions. KE during the hearing also claimed an amount ofRs.15.2 billion, on account of partial load, open cycle and degradation curves along with startup cost for the period from July 2023 to March 2025. KE also submitted that BQPS-III and KCCP heat rate adjustment for previous MYT amounting to Rs.0.6 billion and Rs.0.2 billion are also pending. KE had sought negative adjustment of Rs 5.02 per unit for April 2025 to refund Rs 6.792 billion to its consumers. However, regarding the amount of Rs.15.2 billion on account of partial load, open cycle and degradation curves along with startup cost for the period from July 2023 to March 2025, the Authority has already provisionally retained an amount of Rs. 12.45 billion, from monthly FCAs from Nov. 2024 to Feb. 2025, in order not to over burden the consumers at a later stage for such pending costs. Thus, as of March 2025, an amount of Rs.2.74 billion is pending on account of partial load, open cycle and degradation curves along with startup cost, as per the claims of K-Electric. On the same analogy of not to over burden the consumers at a later stage and also to ensure timely recovery of prudent costs, the Authority has decided to provisionally withhold an amount of Rs. 2.74 billion from the worked out negative FCA of Rs. 5.0200/kWh (negative Rs. 6.79 billion) for the month of March 2025. NEPRA has allowed negative adjustment of Rs 2.99 per unit which will provide a relief of Rs 4 billion to the consumers of Karachi. Member (Tech) Rafique Ahmad Shaikh, has written additional notes on both the determinations in which he raised different issues. In his note on Discos FCA determination he said that the prolonged forced outage of Guddu's 747 MW Steam Turbine (Unit 16) has necessitated continued operation in open-cycle mode, resulting in additional costs of approximately Rs. 670 million (USD 2.38 million) for the month of April 2025 alone. Cumulatively, the financial losses attributed to this outage have reached approximately Rs. 113 billion (USD 402.14 million) since its outage from July 2022. Given the significance of the issue, the CEO of GENCO-II should be required to present a detailed update on the rehabilitation plan and the progress made on restoring Steam Turbine Unit 16 during each Monthly Fuel Cost Adjustment meeting. Copyright Business Recorder, 2025
