ISLAMABAD:
The country’s power regulator is working towards establishing a single system operator with a unified basket for the entire country. Right now, K-Electric — Karachi’s private utility 1 and state-owned distribution companies (DISCOs) have separate systems for calculating electricity costs.
The National Electric Power Regulatory Authority (Nepra) may take one to two years to establish the system, the Power Division told the Economic Coordination Committee (ECC) of the Cabinet during a recently held meeting.
The Power Division apprised that Nepra is working towards establishing a single system operator with a unified basket for the entire country, and the K-Electric’s integration into this framework is expected to materialize within 1-2 years.
It said in order to ensure uniform tariffs in line with the National Electricity Policy and to address anomalies between the K-Electric and other consumers, a proposal was submitted for approval. The Finance Division endorsed the proposal with the recommendation to review it after one year.
For determination of fuel charges adjustment for DISCOs, the proposal of uniformed fuel adjustment might be considered. Nepra, in its comments, stated that fuel charges adjustment for the K-Electric and DISCOs continued to be independently determined based on their respective fleet cost data and generation mix, to ensure regulatory transparency and compliance with cost-reflectivity principles.
The ministry proposed that uniformity at the consumer end may be achieved through policy-driven alignment of the codified Power Purchase Price Adjustments (PCAs), with separate fuel cost adjustment determinations for K-Electric and DISCOs.
Any uniform application had been driven by policy and supported through subsidies/cross-subsidies in accordance with National Electricity Policy.
Furthermore, the impact of implementing the single dispatch model should also be examined while approving the summary. Comments of Nepra are aligned with the proposal.
The Power Division clarified that K-Electric is entitled to 1,000 MW from the national grid, with any additional drawing allowed on a pro-rata basis. It said the K-Electric’s off-take has recently increased to around 1,600 MW, constituting more than 65% of its generation basket.
The Power Division solicited approval of the ECC for the proposal contained in the summary. The ECC approved the proposal with the stipulation that the same shall be reviewed after one year.
During a recent public hearing held by Nepra regarding fuel adjustment, the interveners had raised concerns over the uniformed fuel adjustment for the K-Electric.
They were of the view that the uniformed fuel adjustment would deprive the consumers of the relief which they had been receiving on account of fuel adjustment every month.
