[vc_row][vc_column][vc_column_text dp_text_size=”size-4″]ISLAMABAD: K-Electric (KE) expressed willingness on Wednesday to reach an out-of-court settlement of a seven-year-old issue of clawback of Rs 47 billion with the National Electric Power Regulatory Authority (Nepra), which is supposed to be refunded to consumers.
Aamir Ghaziani, Chief Executive Officer (CFO), officially offered the out-of-court settlement during a public hearing on KE’s FCA adjustment request for March 2023. Tauseef Farooqi, Member Sindh, Rafique Ahmad Shaikh, Member Khyber Pakhtunkhwa Maqsood Anwar Khan, Member Balochistan Mathar Niaz Rana, and Member Punjab make up the Authority. Amina Ahmed approved a positive adjustment of Rs 3.70 per unit in KE’s tariff for March, which will be recovered in billings in May. This change would have a total financial impact of Rs 5.47 billion.
In another hearing, the Authority approved a positive adjustment of Rs 0.34 per unit in FCAs for March Discos versus a request of Rs 1.17 per unit, with a financial impact of Rs 2.9 billion. The issue of clawback, which is pending with the Sindh High Court due to a stay order as the company has shown a net loss of Rs 39.4 billion during the first nine months of the current fiscal year, was raised during the hearing on KE’s request for adjustment in its FCA. Chairman NEPRA stated angrily that the regulator is attempting to have the stay lifted but will be unable to do so because the power utility company is unwilling to resolve the matter amicably with the regulator.
CFO, KE, Aamir Ghaziani offered an out of court settlement with the regulator, as he is authorised to talk on this issue.
“Let’s sit today for an out of court settlement of clawback dispute as I’m authorised to talk on behalf of the company,” said Ghaziani.
In replying to a question, KE officials stated that demand of power utility company has dipped by 9 per cent in March 2023 as compared to corresponding month of 2022. The dip will have financial impact of billions of rupees with the company already facing net loss of over Rs 39 billion in nine months.
Nepra officials noted that average tariff of KE’s own plant stood at Rs 26.44 per unit whereas rate of electricity from national grid was Rs 9.51 per unit in March 2023. The issue of unneeded supply from Lotte’s power plant also came under discussion and Chairman Nepra termed it as an alarming example. Commentators from Karachi, Arif Bilwani, Tanveer Barry, Muhammad Usman, Aneel Mumtaz and Ayaz Nagaria raised different questions about generation cost of KE and other matters.
According to Barry, KE FCA is rising due to its inefficient plant. KE generated 50% of its power from Bin Qasim -III, which is 60% efficient according to its own estimates but has a high FCA. He questioned how the industry would survive with heavy FCA, QTAs, and surcharges on top of taxes.
During the hearing, Chairman Nepra dismissed speculation about his resignation before the end of his four-year contract, stating that he would serve out his term.During the Discos FCA hearing, it was stated that electricity demand fell by 23% in March 2023 compared to the same month in 2022, while overall demand fell by 8%. Possible causes of the drop in electricity demand include unusually cold weather in March compared to last year, as well as industry closures, as evidenced by a significant drop in exports.
In reply to a question, CPPA-G Deputy Director Naveed Qaisar informed that currently circular debt stock stood at Rs 2.5 trillion with a flow of Rs 289 billion during first nine months (three quarters) of current fiscal year. He said an amount of Rs 75 billion has been added to the circular debt during this period.
Mathar Niaz Rana quizzed CPPA-G and NPCC officials for unleashing load shedding when surplus electricity is available arguing that the amount of capacity payment can be reduced with utilization of supply to the consumers.
General Manager, National Power Control Centre (NPCC), Sajjad Akhtar noted that currently maximum demand is 19,000 MW whereas total installed capacity is 43,000 MW and available capacity is 36,000 MW. He was snubbed by Chairman NEPRA for failing to defend NTDC against proposed deduction of Rs 485 million by Nepra due to permanent fault in Guddu-Shikarpur 01 CCKT from February 28 to March 16, 2023.
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Member Sindh Rafique Ahmad Shaikh questioned the performance of power sector entities, questioning why load shedding was not lifted in March when demand was too low. He was angry at the officials for not responding to his simple questions about load shedding when there was surplus RLNG available for power generation.
He also claimed that the amount of capacity payment could have been reduced if load shedding on high loss feeders had been lifted.
“My point is that the country’s power sector system has completely failed.” Consumer overcharging is the result of governance issues,” he added.[/vc_column_text][/vc_column][/vc_row]
