Rs5.02 tariff cut for KE consumers likely
Listen to article
The consumers of K-Electric (KE) are set to enjoy a tariff relief of Rs5.02 per unit on account of fuel cost adjustment (FCA) for March 2025, which has been requested by the power utility in its petition submitted to the National Electric Power Regulatory Authority (Nepra).
In that regard, Nepra conducted a public hearing on Thursday. If approved, the KE consumers will enjoy a total relief of Rs6.79 billion.
The regulator reviewed various operational and financial matters presented by KE, including cost claims, fuel use, system efficiency and measures against electricity theft in Karachi.
KE CEO Moonis Alvi reiterated the utility's firm commitment to tackling power theft through all necessary measures, but highlighted that the efforts were often met with violent resistance from those engaged in unlawful practices.
He pointed to violent mob attacks against the utility and its staff, including female employees. He said the company infrastructure remained under significant threat and recent incidents in P&T Colony and Nazimabad signalled the gravity of the situation, where even law enforcement agencies found it difficult to safely evacuate KE staff.
There had been instances where employees were unable to leave office premises until the next morning, held hostage by mobs, he added. Alvi requested Nepra to urge citizens to refrain from electricity theft and, at the very least, begin paying their previous month's bills.
The KE management stated that 70% of its feeders were exempt from load-shedding while the remaining network with high levels of theft and non-payment of bills continued to face scheduled outages.
It cited infrastructure damage due to theft as a contributing factor to network faults. Disconnection drives were ongoing in the theft-prone areas amid public backlash including mob attacks.
It clarified that disconnections should not be considered a fault in the system; those were largely disconnections because of non-payment.
Nepra sought a month-wise breakdown of the generation cost claim of Rs14 billion submitted by KE as well as asked for detailed documentation under the partial cost adjustment categories. KE officials assured the regulator that the required breakdown would be provided.
Questions were also raised about KE's furnace oil stock valuing at Rs5 billion for the Bin Qasim Power Station-I (BQPS-I), which had a dependable capacity of 350 megawatts. Nepra asked as to why power generation was still being planned based on residual fuel oil (RFO) if the plant was reportedly not operational.
KE responded that maintaining the fuel stock was in accordance with the regulatory requirements and selling it at a loss would not be economically feasible.
Regarding the generation mix, industrialist Rehan Javed emphasised the need for considering solar power projects in the upcoming Indicative Generation Capacity Expansion Plan (IGCEP) as there had been unofficial media reports about their exclusion; something that would be detrimental to consumers in terms of access to affordable electricity.
Nepra dismissed the hearsay, saying no formal decision had been submitted so far and a public hearing would be conducted regarding the IGCEP. It would be early to share any opinion or judgement, it said.
A consumer highlighted the KE's consecutive negative FCA since September 2024 and asked about its comparison with other power distribution companies (DISCOs).
Nepra officials elaborated that currently the KE's FCA was benchmarked against the reference fuel cost of March 2023 at Rs15.99 and all adjustments were based on that, as per Nepra's approved mechanism.
He pointed out that once the updated tariffs were approved, the difference in FCA rates compared to other DISCOs was expected to narrow.
Responding to a question on fuel mix and the potential impact of natural gas availability, KE officials stated that access to local gas could significantly reduce generation costs. Local gas is priced around Rs9 per unit compared to Rs22-24 per unit for re-gasified liquefied natural gas.
As demand rises during peak summer, both KE and Nepra reiterated the importance of transparency, regulatory compliance and collaborative efforts to improve service delivery.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
2 days ago
- Express Tribune
Ju Haknyeon disputes exit from THE BOYZ, says he never agreed to contract termination, agency responds
Ju Haknyeon has strongly denied claims that he has left K-pop group THE BOYZ, stating he never agreed to the termination of his exclusive contract. His agency, ONE HUNDRED, has now issued a formal response rejecting his accusations and defending its actions. Earlier this week, after news broke that he been kicked out of the group following a prostitution scandal with former Japanese adult actress Kirara Asuka, Ju Haknyeon addressed fans on Instagram, stating: 'I have never left the team and have never agreed to the termination of my exclusive contract.' He also challenged the media and his agency to present any proof of illegal activity following reports linking him to a meeting with th AV actress. Ju alleged the agency demanded ₩200 million KRW (around $145,000 USD) in compensation and pressured him to leave. 'I want to hold accountable the agency that unfairly kicked me out and insisted on terminating my contract without any basis,' he wrote. On June 20, ONE HUNDRED responded with a statement: 'We deeply regret the one-sided false claims made by Ju Haknyeon.' The agency explained the decision followed concerns that the situation would damage group promotions. They cited Article 6, Section 3 of his contract, stating the termination was due to 'acts that damage the dignity of the artist to the extent that cause interference with activities.' ONE HUNDRED said it considered the termination 'legitimate and reasonable' and warned: 'If he continues these claims, we will respond with strong legal actions.' The agency added that THE BOYZ will continue activities as scheduled, excluding Ju Haknyeon, and no further comments on the matter would be made.
Business Recorder
3 days ago
- Business Recorder
Petroleum products: Senate body rejects Rs2.50/litre carbon levy
ISLAMABAD: The Senate Standing Committee on Finance and Revenue with majority vote rejected the carbon levy of Rs2.5 per litre on petroleum products proposed in the Finance Bill 2025-26, from which the government has projected to generate a revenue of Rs45 billion. Under the ongoing International Monetary Fund (IMF) programme for Resilience and Sustainability Financing (RSF), the government has agreed for the imposition of the carbon levy on petrol, diesel and furnace oil of Rs5 per litre, which will be phased in over two years. The Federal Board of Revenue (FBR) chairman said that revenue from carbon levy would be increased to Rs90 billion in 2026-27. The levy is a condition of the IMF's RSF programme of $ 1.4 billion. This levy will be imposed on petrol, diesel and furnace oil. Aurangzeb tells Senate body: Govt eyes $2bn loan to boost reserves The parliamentary panel chaired by Senator Saleem Mandviwalla, observed that carbon levy could not implemented through finance bill. The committee observed that the way carbon levy is going to be impose was not correct and rather it should come as carbon tax. The committee also underlined that Petroleum Division has proposed Rs2.5 carbon levy without providing sustainable 'Emission Reduction' plan for the environment. Senator Sherry Rehman opposing the levy said that there is difference between the carbon levy and carbon tax. 'There is no place in the world where carbon levy been imposed but carbon tax used to be enforced'. Sherry Rehman said that carbon taxes been enforced over specific industries with an aim. 'You are imposing all types of levies and that also directly over the public users,' she added. 'It requires an act of law and not enforced with the finance bill,' she added. Senator Mohsin Aziz said that the Supreme Court has restrained imposition of carbon levy in Zafar Iqbal Jhagra case. 'It will be contempt of the court if carbon levy is imposed', he added. After debate the carbon levy was rejected by the government with majority vote. The FBR chairman said that tax on hybrid vehicles is not being increased. The committee also raised questions on the proposed amendment in regulation of Generation, Transmission and Distribution of Electric Power Act 1997 agreed with IMF. According to the proposed amendment, the Debt Service Surcharge (DSS) is currently set at 10 percent of the NEPRA-determined revenue requirement, adjusted each year at the time of annual rebasing, per current practice. In the event that DSS revenues fall short of the annual payment requirement, the DSS will be increased to make up for the shortfall and calibrated per any anticipated future shortfalls in the succeeding year. To facilitate this, NEPRA has proposed to adopt legislation to remove the 10 percent. Discussing the power sector initiative for payment of circular debt through refinancing, NEPRA officials stated that, as of now, Rs3.23 per unit is being charged to consumers. However, NEPRA proposed removal of 10 percent cap limit, as it would help in obtaining necessary refinancing needed for the payment of power sector's circular debt. However, the committee objected while saying that authorities concerned wanted blanket power to increase DSS, which would result in power tariff increase for consumers. The committee decided to call minister and secretary for power to brief the committee. Chairman committee said that they need a briefing on the circular debt repayment plan. If permission is given, you will increase this rate with proposed blanket power and if there is no need to increase it, then why is permission being sought, he asked. The joint secretary took the stand that this will not happen and consumers will continue to be charged Rs3.23 per unit. Senator Sherry Rehman opposed it and said that this cannot be allowed. The joint secretary said that there is a 10 percent service surcharge limit and IMF has demanded that the limit on debt service surcharge be removed. The government will use the surcharge to pay off a debt of Rs1,275 billion. The surcharge is used to pay interest on the circular debt. Currently, a debt service surcharge of Rs3.23 per unit is being charged from consumers, he added. Senator Shibli Faraz said that if the levy money is being spent on roads, what would happen to combating climate change. The prime minister says that the funds will be spent on the roads of Balochistan. The government should first determine its priorities, he added. The committee took exception to certain clauses of 'Public Finance Management Act' allowing autonomous bodies to retain money and submit surplus profit into Public account. The committee called for rationalisation of these clauses, as it would only result in financial irregularities. The committee was briefed on the exemptions provided to businesses located in Khyber Pakhtunkhwa and newly-merged districts. It was informed that the exemptions for cinema operators have been limited to 2030, granting five years exemptions from the date of operations. However, the FBR has extended the withholding exemption for businesses existing in erstwhile FATA till 2026. Highlighting the significance of newly introduced 'Digital Presence Proceeds Act', the FBR chairman stated that the tax has been imposed on digital platforms providing services within the country without retaining physical footprint. The FBR chairman said that a sunset clauses for SEZs and STZs are included in the finance bill. He said that IMF was stressing to limit this tax exemptions for SEZs and STZs to 2027, however after hectic efforts the deadline was extended to 2035. The committee recommended the proposal. The committee also gave its nod to the budgetary proposals of tax on pension income exceeding Rs10 million for individuals under the age of 70. The committee recommended a proposal of the Federation of All Pakistan Universities Academic Staff Associations (FAPUASA) for continuation of 25 percent tax rebate. FAPUASA representatives strongly asserted that this rebate is an essential incentive to retain top academic talent, attract young scholars to the profession, and prevent brain drain from Pakistan's universities. Removing this rebate, they argued, would undermine academic motivation and weaken the research capacity of the country. Copyright Business Recorder, 2025
Business Recorder
3 days ago
- Business Recorder
Payment dispute between CPPA-G, KE remains unresolved
ISLAMABAD: The Power Division has reportedly failed to resolve a dispute over an excess payment of Rs 7.43 billion between the Central Power Purchasing Agency – Guaranteed (CPPA-G) and K-Electric (KE), which has been pending for over a year, sources within CPPA-G told Business Recorder. In May 2024, the Power Division released Rs 172.8 billion to CPPA-G on account of Tariff Differential Claims (TDC) for KE. In this regard, KE referred to the Power Purchase Agency Agreement (PPAA) between KE and CPPA-G and the Tariff Differential Subsidy Agreement (TDSA) between KE and the Government of Pakistan, both signed in January 2024. According to KE, since the execution of the PPAA, it has fulfilled its obligations and paid Rs 71.5 billion directly to CPPA-G for power purchases—demonstrating its commitment to enhancing liquidity and sustainability within the power sector. As a result, KE states that there are no outstanding payables to CPPA-G after December 31, 2023. Discos, KE's tariffs: CPPA-G seeks up to Rs1.5 negative adjustment Furthermore, the power utility noted that following the release of the TDC by the Power Division on KE's behalf, all dues to CPPA-G up to December 31, 2023, have been cleared. In fact, KE claims it made an excess payment of Rs 7.43 billion, which it seeks to be adjusted against future invoices under the PPAA. KE has requested CPPA-G to issue a credit note of Rs 7.43 billion, to be made directly to KE rather than CPPA-G, in line with the TDS agreement. The utility has sent multiple letters to the Power Division requesting this credit note and seeking that future TDC disbursements related to the post-December 31, 2023 period be released directly to KE, as per the effective TDSA. Most recently, on June 10, KE sent a letter to Additional Secretary (Power Finance), Mehfooz Bhatti, summarizing previous correspondence and reiterating its demand for a Rs 7.43 billion credit note and direct release of future TDC amounts. Sources reveal that CPPA-G has shown willingness to issue a credit note of Rs 3 billion to KE, suggesting that the remaining amount be discussed with the Power Division. However, a final decision is still pending, and neither the Power Division nor CPPA-G has shared any update on the matter. 'KE contends that since it is paying the full amount against invoices issued by CPPA-G, a credit should be issued to facilitate proper accounting adjustments,' the sources added. KE has also requested that the Power Division release the additional amount before June 30, 2025. For FY 2025-26, the subsidy allocated to KE has been reduced by over 28%—from Rs 174 billion in FY 2024-25 to Rs 125 billion. However, an allocation of Rs 1 billion has been earmarked for agricultural tubewells in Balochistan, up from Rs 500 million in the previous fiscal year. Copyright Business Recorder, 2025
