In a move that could bring relief to consumers in Karachi, electricity prices are expected to decrease following the revised agreements with Independent Power Producers (IPPs). The National Electric Power Regulatory Authority (NEPRA) has confirmed that K-Electric (KE) has requested a significant reduction in per-unit electricity rates as part of its monthly fuel charges adjustment for November.
During a recent public hearing, KE proposed a reduction of Rs 4.98 per unit. This comes after an earlier adjustment in October when electricity rates were reduced by Rs 0.49 per unit. If approved, this new reduction would lower electricity costs for many consumers in Karachi, though certain categories will remain exempt from the adjustment.
Who Will Benefit from the Reduction?
The proposed reduction of Rs 4.49 per unit will apply to all KE customers except for:
- Lifeline consumers
- Users consuming up to 300 units per month
- Prepaid customers
- Agricultural users
- Electric vehicle charging stations
NEPRA’s Observations on KE’s Operations
The hearing also shed light on KE’s operational challenges and its reliance on external electricity sources. NEPRA member Maqsood Anwar raised concerns about KE’s dependence on the National Transmission and Dispatch Company (NTDC) for a major portion of its electricity supply. He questioned whether KE should be granted a license to generate its own electricity to reduce this dependency.
KE officials explained that 62% of the company’s electricity in November was purchased from NTDC, which was relatively cheaper compared to other sources. Additionally, KE generated 21% of its power using LNG and 13% from furnace oil.
Rising Demand and Future Plans
KE representatives also highlighted the growing electricity demand in Karachi. The average electricity demand in November 2024 stood at 2300 MW, marking a 12% decrease from October’s demand of 2600 MW. However, compared to November 2023, the demand has increased by 300 MW, reflecting a year-on-year growth of 13%.
To meet the rising demand, KE officials emphasized the importance of shifting to captive power plants and adopting alternative energy sources, such as solar power. These measures are expected to support Karachi’s growing energy needs in the coming years.
NEPRA’s Final Decision Pending
NEPRA member Rafiq Sheikh also inquired about KE’s plans for handling projected electricity demand growth over the next 5-6 years. In response, KE highlighted its strategy to leverage alternative energy and improve efficiency through captive generation.
The detailed decision on the proposed fuel adjustment will be issued by NEPRA after further data review. For now, the potential reduction offers hope for lower electricity bills in Karachi, easing the financial burden on many households and businesses.
