With the start of New Year, the National Electric Power Regulatory Authority (Nepra) on Tuesday approved increase in tariff of Karachi Electric Supply Company (KESC) by Re 0.66 per unit on account of monthly fuel price adjustment mechanism.

Giving New Year gift to Karachitis at the advent of 2013, the KESC has increased tariff of electricity. The increase has been made on account of controversial fuel price adjustment (FPA) mechanism. For the month of October, a hike by Re0.46/kwh and Re0.20/kwh for November 2012 across the board has been approved by the Nepra. The revised tariff will not be notified until a decision taken by the Islamabad High Court (IHC) and then the month of collection from consumers would be included in the notification.

However, lifeline consumers (domestic consumers using 50 units in a month) will be exempted from the rise in electricity prices. New increase in per unit price of electricity will be implemented after the decision of Islamabad High Court. More, according to Nepra fuel cost variation of KESC’s own generation cost in October stood at Rs 645.741 million whereas it amounted to Rs 371.304 million in November 2012.

The regulatory authority took this decision at a public hearing led by its Chairman Habib Ullah Khilji here at the office of Nepra, which was attended by all the stakeholders. The regulator after conducting public hearing approved this hike for KESC consumers for the months of October and November 2012.

During the hearing, the KESC adopted that fuel price cost was increased due to power generation from Bin Qasim Power Plant, which would be collected from consumers. On the other hand, during the course of hearing the Nepra has expressed its grave concerns over the KESC failure regarding power generation not in line with its full capacity. Nepra said the KESC agreement started from 2005 has been expired on December 31 so it (KESC) contrary to the law is purchasing electricity from National Transmission Dispatch Company (NTDC).

Sources aware of the matter informed that fuel cost variation on power generation from external generation sources was Rs 7.449 million in October and Rs 135.864 million in November. This results in that total cost variation in October at Rs 638.291 million and November Rs 235.439 million. KESC sold 1,389.2 million power units to the consumers in October and 1,196.102 million units in November 2012. This shows total monthly variation of 45.947 paisa per unit in October and 19.684 paisa per unit in November 2012.