NEPRA deliberates KE’s tariff petitions for reliable power supply to Karachi

KARACHI: The National Electric Power Authority (NEPRA) conducted a hearing on 27th June, 2024 on K-Electric’s distribution, transmission, and supply petitions under the utility’s Multi-Year Tariff for the period from FY 2023-24 to FY 2029-30.

The petitions submitted highlight necessary components that will enable KE to maintain and invest for an efficient and reliable power supply to its service territory.

The subject of the hearing and subsequent decisions is not linked with the price of electricity charged to customers in their monthly bill, which remains governed by the uniform tariff policy which ensures equal charges across Pakistan for individual customer categories.

The hearings are a continuation of the Multi-Year Tariff process in which the regulator has issued its decisions on KE’s c. USD 2 billion investment plan for Transmission and Distribution, and its Power Acquisition Programme to increase the share of renewable and indigenous resource-based energy.

The petitions under discussion provide the groundwork to secure Karachi’s sustainable energy future. Under these tariff petitions, KE has proposed a cost-reflective tariff structure highlighting several key elements, such as an annual and quarterly indexation mechanism to ensure that the utility’s tariff reflect changes in macroeconomic conditions and remain sustainable.

In addition, a mechanism has been proposed to adjust for changes in the volume of energy (in gigawatt-hours) dispatched to the city, to ensure recovery of prudent costs, essential for maintaining service quality. Ultimately, this financial certainty will empower KE to embark on network expansion to meet growing energy demand.

Under the investment plan, KE is investing in expanding its transmission and distribution network through the addition of new grids – including the first 500 kV facility at KKI – to meet the growing needs of its customers.

At the same time, the Power Acquisition Programme is aiming to add 1300 MW of renewable energy projects to embed sustainability and enable access to affordable power. The company is also deploying advanced, innovative technologies such as Advanced Distribution Management Systems for improved network governance. These are being coupled with initiatives to reduce line losses and power interruptions, ultimately enhancing network stability.

As KE endeavours to meet the growing energy needs of Karachi, timely approval of these petitions remains a paramount element in enabling the city’s economic growth and provision of reliable and sustainable power supply to its residents and businesses.