K-Electric proposes reduction in electricity bills via fuel cost adjustment

K-Electric has proposed a reduction of PKR 4.84 per kWh in the electricity bills of consumers under the Fuel Cost Adjustment (FCA).

Following a public hearing scheduled for March 20, 2025, the National Electric Power Regulatory Authority (NEPRA) will issue a decision clarifying the FCA amount to be passed on to customer bills and the applicable period.

It is pertinent to note that this is the fifth consecutive FCA adjustment being passed on as a benefit to KE customers. The previous adjustments included September 2024's FCA of 0.18 paisa, October's FCA of 0.49 paisa, November's FCA of PKR 1.23, and December's FCA of PKR 3.0 per kWh.

Fuel cost adjustments are incurred by utilities due to global variations in fuel prices used for electricity generation, as well as changes in the generation mix. When fuel prices rise, the adjustments are reflected in consumer bills.

Conversely, when global fuel prices decrease, the relief is passed on to customers in the form of reduced FCA charges.

KE has also highlighted adjustments related to part load operations, degradation curves, and startup costs, pursuant to the determination of the generation tariff for KE's power plants post-June 2023.

The company has requested NEPRA to consider recovering these costs from negative fuel cost variations to ensure that consumers are not burdened at a later stage.

All FCAs are calculated in accordance with regulatory guidelines and are reflected in customer bills following NEPRA’s scrutiny and approval.