NEPRA’s recent approval of a positive Fuel Charge Adjustment (FCA) for K-Electric in June 2023 signifies an important development in the energy sector. The adjustment, influenced by shifts in global fuel prices, underlines K-Electric’s commitment to providing reliable and cost-effective electricity to its customers.
In a significant development for the energy landscape, NEPRA (National Electric Power Regulatory Authority) has officially announced its decision regarding K-Electric’s petition for a positive Fuel Charge Adjustment (FCA) for the month of november 2023. The decision comes after a thorough review process and holds implications for both the energy provider and its customers.
According to NEPRA’s verdict, the positive FCA for June 2023 has been set at a rate of 2.3112 per unit. This adjustment will be applicable to customer bills exclusively during the month of August 2023. Fuel Charge Adjustments (FCAs) are authorized by NEPRA and are contingent on the global fuel prices, which are then passed on to consumers in accordance with NEPRA’s regulations and the directives of the Government of Pakistan.
The basis for the positive FCA for June 2023 lies in K-Electric’s prudent utilization of fuel sources based on their economic merit order. This approach, coupled with the fluctuating global fuel prices, has culminated in a multi-faceted impact on the FCA. Notably, the price of Furnace Oil has risen by 6% when compared to the reference month of March.
In contrast, the price of RLNG (Regasified Liquefied Natural Gas) purchased from different sources has exhibited a mix of changes: a decrease of 6% for RLNG from PLL (Pakistan LNG Limited), a 2% decrease for RLNG from SSGC (Sui Southern Gas Company), and a 1% decrease in the price of power purchased from CPPA-G (Central Power Purchasing Agency – Guaranteed).
K-Electric, a publicly listed company, has been a key player in Pakistan’s energy sector since its incorporation in 1913. Privatized in 2005, it stands as the sole vertically integrated utility in the country, catering to an extensive 6500 km square territory encompassing Karachi and its neighboring areas. For the convenience of Karachi citizens, they can easily check their KE duplicate bill here.
The majority ownership (66.4%) of K-Electric is held by KES Power, a consortium of investors including Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding) of Kuwait, and the Infrastructure and Growth Capital Fund (IGCF). Additionally, the Government of Pakistan retains a minority stake (24.36%) in the company.
The approval of the positive FCA for June 2023 underscores K-Electric’s continuous efforts to balance economic considerations and customer satisfaction. This adjustment, while reflecting the dynamic nature of global fuel markets, highlights the company’s dedication to delivering reliable and cost-effective electricity solutions to its extensive customer base.