KE Counters NEPRA / Government Claims on Company Operations

KE Counters NEPRA / Government Claims on Company Operations

Several incorrect statements are being circulated as fact

K-Electric (KE) via its press statement countered the claims made by officials of the Ministry of Water & Power and NEPRA on KE’S technical and financial operations in the Senate Standing Committee’s meeting held on 29th July.

Rebutting allegations on the pricing of electricity, statement unequivocally stated that K-Electric was not purchasing electricity at a cheaper rate than the rest of the country’s Distribution Companies (DISCOs), nor was it purchasing power at a subsidized or discounted rate. KE clarified that the rate being charged by NTDC is subject a decision by the Economic Coordination Committee issued in 2008 which states in Clause 5:

“It was inter-alia agreed, in principle, that KESC be treated at part with the DISCOs for tariff purposes which shall be applicable with prospective effect as per rules.”(ECC Decision –October 2008)
Statement elaborated that the ECC had made this decision after noting that Karachi was being discriminated against by being sold electricity at a higher rate than other DISCOs. This decision eliminated disparity and brought Karachi at par with other DISCOs.

The statement further clarified that there is a uniform tariff regime across the country. The tariff being charged by KE to consumers are determined entirely by NEPRA after a scrutiny of K-Electric’s generation, power purchasing, and other particulars. Hence all claims that the electricity being sold to the consumers was at a cheaper rate than it was bought are being blown out of proportion. Press statement reiterated that at no point has KE received any discount from the NTDC and all payments to the institution have been made.

Correcting the unusual allegation that the price of gas supply being charged to KE would bankrupt the Sui Southern Gas Company, press statement mentioned that the tariffs for gas supply were determined by OGRA and that KE was being charged the same tariff which was applicable to WAPDA, Generation Companies (GENCOs), and the Power Sector. This tariff amount is the third highest as determined by OGRA. Making unsubstantiated claims was akin to deliberate defamation of KE’s operational integrity.

KE has conducted meetings with the government, with K-Electric’s management on every level, contrary to the rumour that the management had been unavailable. Welcoming the decision to continue supply of 650 MW to the city, press statement also mentioned that KE had voiced its opinions on all forums regarding the importance of 650MW supply to Karachi.

Lastly, the Press statement added that the addition to the system made by KE was being misquoted by NEPRA. KE has added 1037MW to its generation fleet since 2009 and also invested in rehabilitating plants which were running on low efficiency. In fact, NEPRA itself had approved the licenses for the generation plants, so it was absurd for them to go back on their documented approval.

Statement concluded by adding that KE has also made substantial investment in transmission and distribution network of the system. The series of accusations seemed to deliberately take a stance against K-Electric, which was of high concern. Such baseless rumours would negatively impact the sentiment of foreign investors who have invested in K-Electric and who were looking at Karachi and Pakistan as a lucrative market.