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KESC defends Nepra’s decision to hike tariff

The Karachi Electric Supply Company (KESC) on Thursday defended a power tariff increase approved by the National Electric Power Regulatory Authority (Nepra) a day earlier.

It said the increase was a decision of the authority based on a mechanism derived from the “fuel-mix” used by the utility to generate electricity during a given period.

Due to a less than adequate supply of gas, the power utility said it had been constrained to increase reliance on 370 percent more expensive furnace oil to produce electricity in order to maintain the regular regime of outages in the city.

Fuel being the basic ingredient for power generation has a direct impact on the end user tariff and with the spiraling international oil prices furnace oil is definitely not the preferred fuel of choice for power generation, according the KESC.

The electricity supplier said it was not in favour of increasing the power tariff and making electricity more expensive for the average consumer. Rather, it said, its focus was on generating affordable electricity, which could only happen if it was provided with an adequate supply of the preferred fuel — natural gas.

“It is only in the interest of the consumers that [the] KESC has all along been demanding an adequate supply of natural gas which is the only way to check the spiraling power tariffs.

“Ironically, despite having the generation capacity, [the] KESC has never received a stable supply of natural gas commensurate with its requirements.”

Especially with the induction of its 560MW state-of-the art power plant, Bin Qasim 2, set up at a cost of $450 million, its requirement of 400mmcfd of gas was at best met only half way, around the 50 percent, the power utility said.

Had the gas supply been provided as per the KESC requirements, not only the duration of power cuts could be brought down but the power tariff could also be kept in check and within the reach of consumers by and large, it said.

In order to minimise its reliance on the imported and expensive furnace oil, the KESC stressed, it needed to be provided with at least 400 mmcfd of gas on a stable and regular basis, the ultimate beneficiary of which were the end users — the power consumers.

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