ISLAMABAD, April 9, 2025 – In a welcome development for electricity users, K-Electric (KE) consumers are set to receive a substantial refund of Rs 6.67 billion under the Fuel Charges Adjustment (FCA) mechanism for February 2025.
This refund comes in the form of a proposed negative adjustment of Rs 6.62 per unit, aimed at passing on the benefit of lower fuel costs directly to consumers.
According to the FCA petition filed by KE, the adjustment stems from a reduction in the cost of power generation. KE stated that the refund is part of its continued commitment to reflect real-time changes in fuel prices and ensure transparency in billing. This marks the sixth consecutive FCA revision where KE has sought to adjust rates in line with actual fuel costs.
However, the February FCA filing by KE also includes a request to adjust Rs 13.9 billion in previously unaccounted-for generation costs spanning July 2023 to February 2025. These costs include partial load operations, open cycle operations, degradation curves, and startup costs. Of this amount, Rs 7.4 billion has already been partially adjusted through the FCA mechanisms for November and December 2024.
KE has appealed to the National Electric Power Regulatory Authority (Nepra) to allow further recovery of these accumulated costs using the cushion provided by the negative FCA for February. The utility argues that failing to account for these pending expenses now may result in a heavier burden on consumers in the future.
Nepra is set to conduct a public hearing on April 16, 2025, where KE will formally present its case for the negative FCA and accumulated cost adjustments. Business representatives and members of the public will also be invited to voice their opinions on the matter.
In its previous FCA determination for January 2025, Nepra acknowledged the existence of Rs 6 billion in pending costs despite already withholding Rs 7.45 billion. Consequently, the authority deducted Rs 2 billion from the January FCA refund to allow space for future adjustments.
If approved, KE’s FCA proposal for February could ease the financial pressure on households and businesses in Karachi, while also addressing long-standing cost recovery issues in a balanced manner.