K-Electric presents three different scenarios for FCA

Source: The Nation

ISLAMABAD - K-Electric (KE) has presented three different scenarios for the fuel cost adjustment (FCA), and sought National Electric Power Regulatory Authority (NEPRA) nod for burdening the consumers by Re0.44 per unit, on account of one scenario, and a relief of up to Rs1.18 per unit based on two other calculations.

In a petition submitted to NEPRA, KE has requested for provisional fuel cost adjustment (FCA) under three different scenarios for the month of April 2024. In the first scenario, KE seeks to provide a Rs 1.18/unit relief to its consumers under the FCA for April 2024. This scenario has been calculated on the basis of reference interim tariff of March 2023.

Under the second scenario, KE has requested a hike of Rs 0.44/unit based on the FCA-reference monthly cost. The third scenario also proposes a relief of Re 0.74/unit based on the FCA-reference yearly average cost. The FCA mechanism is designed to adjust the difference between the actual fuel cost and the reference fuel cost. The FCA-Reference Interim Tariff addresses the difference between actual fuel costs versus reference fuel costs as per interim tariff. The FCA-Reference Monthly Cost examines the variance between actual fuel costs and reference fuel costs according to the tariff petition, while the FCA-Reference Yearly Average Cost calculates the difference based on annual weighted average fuel costs from tariff petitions.

NEPRA has outlined specific issues to be addressed during the hearing. These include determining whether the requested FCA relief by KE is justified and whether KE has adhered to the merit order in dispatching its power plants and purchasing power from external sources.

The regulatory authority has invited all interested and affected parties to submit their written or oral comments or objections for consideration during the hearing. This engagement is in line with the statutory provisions allowing public participation in such regulatory decisions. The National Electric Power Regulatory Authority (NEPRA) has scheduled a public hearing on the KE's petition on June 12, 2024, to deliberate on the matter. After the hearing, the regulator will decide to apply one of the three scenarios for the determination of April FCA.