KE proposes Rs4.84 per kWh FCA relief for January 2025

March 07, 2025 (MLN): K-Electric submitted a provisional monthly fuel charge adjustment (FCA) request for January 2025, proposing a relief of Rs4.84 per kWh for customers.

Following a hearing, yet to be announced, the National Electric Power Regulatory Authority (NEPRA) will issue a decision clarifying the FCA amount to be passed on to customer bills and the period for which they will be applicable.

Additionally, NEPRA has issued its decision regarding KE’s petition for the provisional monthly Fuel Charges Adjustment (FCA) requested for December 2024, indicating a relief of Rs3 per kWh.

This will be passed on to customers in their March 2025 bills, according to the press release.

NEPRA has provisionally retained an amount of Rs2.01 billion in respect of adjustments on account of partial load, open cycle, and degradation curves, along with startup costs.

This retention is in accordance with NEPRA's decision regarding Generation Tariff for the control period starting from July 2023 onwards from the FCA for December 2024.

This amount will be adjusted against the pending claims of KE to ensure that consumers are not burdened at a later stage.

Fuel charge adjustments are incurred by utilities due to global variations in fuel prices used to generate electricity and changes in the generation mix.

These costs are reflected in customer bills following NEPRA’s scrutiny and approval.

Customers also benefit from negative FCA in their bills when global fuel prices decrease.

Rates charged to customer bills are determined by NEPRA and notified by the Federal Government.

As per the Regulatory Authority’s decision, the FCA shall be applicable to all consumer categories except lifeline consumers, domestic protected consumers, and Electric Vehicle Charging Stations (EVCS).

It will also not apply to prepaid electricity consumers of all categories who opted for the prepaid tariff.

K-Electric (KE) is a publicly listed company incorporated in Pakistan in 1913 as KESC.

Privatized in 2005, KE is the only vertically integrated power utility in Pakistan supplying electricity to Karachi and its adjoining areas.

The majority shares (66.4%) of the Company are owned by KES Power, a consortium of investors including Al-Jomaih Power Limited of Saudi Arabia, National Industries Group (Holding), Kuwait, and the Infrastructure and Growth Capital Fund (IGCF).

The government of Pakistan is also a shareholder (24.36%) in the Company, while the remaining shares are listed as free float shares.

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