KARACHI: Chairman Businessmen Group (BMG) Zubair Motiwala and President Karachi Chamber of Commerce & Industry (KCCI) Muhammad Idrees, while expressing deep concerns over high production cost of electricity being generated by K-Electric (KE), urged that KE’s inefficient power generation plants should be shut down while the power generation mix must also be improved to reduce the power tariffs.
In a letter sent to Chairman National Electric Power Regulatory Authority (NEPRA) prior to NEPRA’s Hearing scheduled to held on November 2nd & 3rd, 2021, Chairman BMG and President KCCI stated that if it was not possible for KE to bring down the cost of power generation then it should depend more on external purchases. Focus should be to develop more power plants based on renewable energy while necessary transmission infrastructure has to be put in place to enable KE to purchase more electricity from Central Power Purchasing Agency (CPPA) as currently, the utility service provider was unable to do so due to inadequate transmission system, they added.
While referring to a news item appearing in a section of press, Chairman BMG and President KCCI noted that NEPRA itself has pointed out that the average fuel cost for KE’s own system in 2020-21 was Rs12.41 per kilowatt hour while CPPA’s fuel cost ranged between Rs3.24 and Rs6.06 per unit in 2020-21. This situation was really alarming as KE’s generation cost was more than double as compared to purchased power.
They mentioned that the share of KE was just between 5 to 10 percent of the country’s total power generation. Since KE’s own generation was more than two times expensive because of mainly being thermal based, the consumers particularly industries of Karachi suffer more due to fuel price hikes. Lately, KE has demanded an increase of Rs. 3.454/Kwh for September 2021 under monthly Fuel Charges Adjustment, increasing the electricity rate by around 16 percent which was an exorbitant surge considering the fact that during the quarter (Jul-Sep’21) the average CPI inflation was 8.58 percent; Pak Rupee has devalued by 9.68 percent and the price of Brent inched up by 3.53 percent.
