Karachi: In a move that will bring some financial respite to electricity consumers in Karachi, the National Electric Power Regulatory Authority (NEPRA) has approved a reduction of PKR 3.64 per kilowatt-hour (kWh) in K-Electrics (KE) Fuel Charges Adjustment (FCA) for the month of February 2025. The relief will be reflected in consumer bills for May 2025.
NEPRAs decision comes in response to KEs petition for provisional monthly FCA, which is a mechanism to adjust electricity tariffs based on fluctuations in fuel prices and changes in the generation mix. The reduction is expected to benefit most consumers, offering savings amid rising costs of living.
However, the FCA relief will not be applicable to certain categories of consumers, including lifeline consumers, domestic protected users, prepaid electricity customers of all types, and Electric Vehicle Charging Stations (EVCS).
In a significant measure to protect consumers from potential future tariff hikes, NEPRA has provisionally withheld PKR 3 billion from the FCA. This amount pertains to adjustments related to partial load, open cycle operations, degradation curves, and start-up costs. It will be adjusted against pending claims of KE in line with NEPRAs Generation Tariff Decision for the control period starting July 2023.
Fuel charge adjustments are a standard practice, accounting for global fuel price variations used in electricity generation. These adjustments are only applied after thorough review and approval by NEPRA. When fuel prices decrease, the FCA can result in negative adjustments, which are passed on to consumers as relief.
About K-Electric:
K-Electric (KE), originally established as KESC in 1913 and privatized in 2005, is Pakistans only vertically integrated power utility. It supplies electricity to Karachi and adjoining regions. The majority stakeholder (66.4%) is KES Power, a consortium including Saudi Arabias Al-Jomaih Power Limited, Kuwaits National Industries Group (Holding), and the Infrastructure and Growth Capital Fund (IGCF). The Government of Pakistan holds a 24.36% stake, with the remaining shares publicly traded.
The latest FCA relief underscores NEPRAs ongoing role in ensuring fair energy pricing and protecting consumer interests amid global fuel market volatility.
