Latest news with #Rs7.173
Express Tribune
30-06-2025
- Business
- Express Tribune
NEPRA grills Power Division over FCA deferral
The National Electric Power Regulatory Authority (NEPRA) held a heated hearing on the Power Division's request to defer April 2025's Fuel Cost Adjustment (FCA) of Rs4.69 per unit for K-Electric (KE) consumers. The proposal drew sharp criticism from NEPRA members and Karachi's power consumers, who questioned both its legality and timing. NEPRA Member Legal Amina Ahmed criticised the Power Division's abrupt change of stance, noting that the reference price of Rs15.99 had remained unchanged for two years. She argued there was no legal or practical basis for the deferral and called out the ministry for its delayed response. When asked about policy guidelines and cabinet approval, the ministry's representative gave a 10 to 15-day timeline. KE's representative informed the regulator that Rs7.173 billion in relief was due to be passed on to consumers, noting that the utility had offered negative FCA adjustments since September 2024. The Power Division argued that deferring the FCA was necessary to safeguard the federal budget, warning that immediate implementation could place further fiscal strain on public finances. NEPRA, however, dismissed the plea, stating that it lacked legal merit and procedural basis. NEPRA Senior Legal Advisor Ahmed Ibrahim asserted that NEPRA held exclusive jurisdiction over tariff matters. He said no court order existed to halt the process and that the ministry's petition was premature. Without a stay order, NEPRA's earlier determination remains binding. He further clarified that the Ministry of Energy's administrative role did not entitle it to interfere in regulatory decisions. NEPRA chairman echoed these sentiments, noting the hearing had been scheduled in advance and the deferral request came too late. He questioned why the legal process hadn't been followed earlier. KE CEO Moonis Alvi said KE would comply with NEPRA's decision but urged that fairness be considered. He added that industrialists planning production and exports faced uncertainty due to the ambiguity. Karachi-based industrialist Rehan Javed said the Power Division never objected when positive FCA adjustments led to higher tariffs for Karachi. He called the sudden concern selective and biased, pointing out that Karachi consumers also paid the PHL surcharge despite not contributing to the circular debt. He reminded NEPRA of International Monetary Fund (IMF) demands for timely tariff adjustments and greater efficiency. Javed stressed that any subsidy settlements between the government and KE were unrelated to the current FCA issue and demanded NEPRA act independently. He added that while Karachi stood to gain this time, it had often borne the brunt of losses in the past. Participant Arif Bilvani voiced frustration over the Power Division's belated intervention. He argued that Karachi consumers deserved the relief now, just as they had borne excessive charges earlier. KCCI representative Tanveer Barry called the Power Division's objections "unfair," highlighting that Karachi was being penalised despite not contributing to the circular debt. The session concluded with NEPRA reaffirming that decisions must be made transparently and free from ministry pressure. A final ruling is awaited and is expected to have wide implications for Karachi's power consumers. DISCOs tariff may rise Rs1/unit Separately, NEPRA also held a hearing on the May 2025 FCA request for DISCOs, in which the Central Power Purchasing Agency (CPPA-G) warned that power tariffs could rise by up to Rs1 per unit from July 1 due to increased gas prices for power generation. CPPA-G initially sought a 10 paisa per unit increase for May, which NEPRA said it would consider after reviewing the data. According to CPPA-G, the 10 paisa hikeif approvedwould be applicable for one month only and add Rs1.25 billion to consumer bills. The reference fuel cost for May was Rs7.39/unit, compared to Rs7.49/unit in April. CPPA officials warned that higher gas prices would likely push tariffs up by Rs1 per unit. They also cautioned that without improved bill recoveries, the government may resort to raising surcharges to manage the ballooning circular debt. Currently, consumers are paying a Rs3.23 per unit surcharge solely for interest payments on circular debt. This amounts to Rs323 billion annually. According to CPPA-G data, actual fuel cost for May was Rs7.4940 per kWh, while the reference cost was Rs7.3925an increase of Rs0.1015/unit.
Express Tribune
29-06-2025
- Business
- Express Tribune
Karachi slams attempt to block FCA relief
Listen to article Karachi-based industrialists and consumers have voiced serious concerns over the Power Division's interference in blocking relief and rescheduling K-Electric's (KE) hearing. Various stakeholders have approached the national power regulator, National Electric Power Regulatory Authority (NEPRA), urging it to reject the Power Division's request to deny Rs7.173 billion (Rs4.69/kWh) in Fuel Charges Adjustment (FCA) relief for April 2025 to KE consumers. They have also expressed serious concerns over the rescheduling of KE's hearing. Prominent Karachi-based energy expert and intervener Arif Balwani has written a letter to the power regulator opposing the Power Division's last-minute request to defer the FCA hearing for K-Electric. The hearing, originally scheduled for June 19, 2025, was rescheduled to June 23, 2025. NEPRA has now fixed June 30, 2025, for the next hearing. "It must be stated unequivocally that the FCA mechanism is a statutory and formula-based process under the NEPRA Tariff (Standards and Procedure) Rules, 1998. It is not a petition, nor does it entail discretionary regulatory indulgence warranting intervention," Balwani stated, adding that the authority's notice — consistent with past practice and law — rightly invited "interested/affected parties to submit written/oral comments as permissible under the law." He said that the notice did not — and could not — invite any intervention, which is governed by specific provisions and procedures applicable to tariff petitions or licensing matters under the NEPRA Act and relevant regulations. "The belated oral objection raised by the Power Division (PD) — during the hearing itself and without prior written noticeis procedurally improper, contrary to principles of natural justice, and has no basis in the NEPRA Act (XL of 1997), the NEPRA Tariff Rules, or any codified regulation," he said, adding that there is no statutory provision empowering the authority to suspend or defer a lawfully convened FCA hearing at the unilateral behest of an executive division lacking any regulatory jurisdiction. He further added that the PD's contention regarding the reference fuel price of Rs15.9947/kWh — derived from the previous Multi-Year Tariff (MYT) 2016-2023 — has been repeatedly used for interim FCA determinations without objection. The Power Division has acquiesced to the continued application of this reference benchmark for several months post-MYT expiry. It cannot now be permitted to challenge its validity retroactively without citing any contrary provision of law or proposing an alternative interim methodology. More critically, the Additional Secretary of the Power Division admitted on record that the request for deferral was not backed by any formal decision of the federal government, cabinet, or Economic Coordination Committee (ECC). Balwani said this renders the request ultra vires, lacking both authority and democratic legitimacy. The absence of any Cabinet directive further underscores that this initiative is an unauthorised executive overreach attempting to influence the statutory functions of an independent regulatorcontrary to the separation of powers enshrined in the Constitution. He said the Power Division's further assertionthat the negative FCA should not be passed on to KE consumers due to International Monetary Fund (IMF) programme constraintsis not only irrelevant in the context of regulatory law but also unsupported by any statutory or contractual obligation.
