K-Electric announces Winners of the first 7/11+ Innovation Challenge

K-Electric (KE) announced the winners for the first 7/11+ Innovation Challenge in partnership with INNOVentures Global at a day-long event held at Habib University in Karachi.

KE’s 7/11+ Innovation Challenge is the first of its kind event in Pakistan’s utility market, designed for entrepreneurs, startups, researchers, and university students to promote and accelerate strategic innovation. Participants spent the first half of the day making final pitches to the esteemed Jury followed by a panel discussion and award announcement in the second half. Chairman NEPRA, Tauseef H. Farooqi was also in attendance as the Chief Guest.

The challenge is aligned with the United Nations Sustainable Development Goals (UNSDGs), particularly Goal 7 – access to affordable, reliable, sustainable and modern energy for all and Goal 11 – sustainable, inclusive, safe and resilient cities and communities. K-Electric aims to highlight the importance of innovative problem solving and critical thinking within the public and provide a platform to convene organizations and individuals across Pakistan working at the critical intersection of sustainability and innovation.

Participants from various scholastic backgrounds took part in this Innovation Challenge in teams, beginning in February of 2022 going through stages of pitches, capacity building sessions and focused mentoring. The journey began with over 300 applications hailing from several startups, universities and relevant fields of study out of which 10 teams made it to the finals.

Speaking to the audience, Tauseef H Farooqi, the Chairman of National Electric Power Regulatory Authority (NEPRA) shared that “As a regulator, we have a tremendous responsibility towards society that extends beyond the creation of affordable, accessible and reliable energy supply. We must also support the community, through constant innovation and development. Under our Power with Prosperity, Power with Safety, Power with Equality, Power with Security and Power with Unity plans we have uplifted and transformed the socio-economic landscape of Pakistan aligned with the UNSDG’s to impact over 32 million lives, creating over 46,000 jobs including 8,400 jobs of women alone with over 32 Billion Rupees of financing. All this was aimed to promoting work-place safety, diversity and inclusion and security. Innovation is imperative for positive change and we must continue to strive for a better and brighter future.” Mr Farooqi also endorsed how K-Electric, the only vertically integrated power distribution company in Pakistan, was stimulating grass-root level impact through their best practices and serving as a role model within the power sector.

“K-Electric is one of Pakistan’s most innovative utility companies making substantial improvements since privatization through investments and automation of its infrastructure. Deeply embedded in the very fabric of this great city, KE continues to positively contribute towards Karachi’s sustainable and innovative growth.” Stated KE, Chief Executive Officer, Syed Moonis Abdullah Alvi. “Through KE’s 7/11+ Innovation Challenge we aim to create operational excellence, enhance customer experience, and optimize our supply chain and logistics to energise the city’s future in a sustainable and customer-centric way.”

The Innovation Challenge Jury was made up of dynamic profiles in the current Pakistani innovation ecology including Farhan Anwar, Assistant Professor of Practice Social Development and Policy at Habb University, Seher Abbas, Co-Chair, Karachi Hub Women in Energy & IFC, Sheikh Imranul Haq, Energy Expert, Shehryar Hydri, MP, Deosai Ventures, Shaista Ayesha, CEO of SEED Ventures, Naeem Zamindar, Founder of Neem Financials and Naz Khan, CSO at KE. Together they selected the top 10 finalists which included Ezbike with their electric bike and battery swapping service, Ezgeyser with the sustainable energy plan, Lorawan with meter reading retrofit, Novel Insulator with an insulator design, OptimaLoad with a solution to balance load on a transformer Orko with an application to manage EV charging stations, Power Distribution Improvement with an efficient short and long term demand forecasting technique, Smart Transformer Health with a device to monitor health of a transformer, Thingsty with IoT applications for domestic and commercial users and Vtol Dynamics with drones for geospatial survey and monitoring. Total cash prize pool was 3 million PKRs – 1.5 million to the winner, 750,000 PKRs each for the first and 2nd runner up.

After a rigorous and competitive journey, the Energy Informatics Company of LUMS emerged as the winner for their Data Analytics based Prediction and Forecasting model, while ezBike’s Electric bike and charging infrastructure was awarded first runner up and NUST PNEC’s was the second runner up for their LoRaWan based meter retrofit technology capable of incorporating smart technology on conventional electricity meters.

Naz Khan, K-Electric’s Chief Strategy Officer said “KE’s 7/11+ Innovation Challenge is a move to embrace innovation not just as a corporate social responsibility but as a strategic priority. At KE, we believe the emerging utilities landscape, post CTBCM, will require organizations like ours to go beyond the organizational boundaries and knowledge-bases to pilot and deploy the best ideas for the benefit of the society at large. The Innovation Challenge has enabled us to do just that by synergizing with some very talented individuals from start-ups, universities, and academia to create advanced solutions that will no doubt positively contribute to both KE and Karachi’s progressive development.”

Dr. Athar Osama, Managing Partner INNOVentures Global, appreciated this novel innovation effort, “I am glad that KE has managed to establish this platform,” acknowledging how this was “the best way forward for corporate sector towards a transition to a developed economy.”

NEPRA TO CONDUCT A PUBLIC HEARING ON KE’S PETITION FOR OCTOBER’S FCA AND QA FOR JULY-SEPTEMBER

Karachi – NEPRA announced to conduct a public hearing on 30 November over the petition submitted by K-Electric on account of Fuel Charges Adjustments (FCA) for October 2022 and Quarterly Adjustments for July to September 2022.

For the month of October, K-Electric has filed a petition for the negative FCA at a rate of PKR 1.883/kWh and is the fourth consecutive negative FCA since July. On the other hand, KE has also requested a reduction of PKR 7.833 / kWh rupees on account of Quarterly Adjustments. According to the spokesperson of the power utility, the impact of quarterly adjustments is usually not passed to consumers under the uniform tariff policy applicable across the country. However, the final decision rests with the Federal Ministry of Energy, Government of Pakistan, and the NEPRA Authority.

FCA is dependent on the global prices of fuel and is passed on to consumer bills under the prescribed rules and regulations of NEPRA and the Government of Pakistan. The negative FCA for October 2022 is primarily due to a decrease in prices of RLNG, Furnace Oil, and power purchased from CPPA-G. The price of RLNG in October 2022 decreased by 16% from September 2022. The price of Furnace Oil in October 2022 has decreased by 6% from September 2022, and the price of power purchased from CPPA-G in October 2022 has decreased by 6% from September 2022.

As per KE spokesperson, FCAs are approved by the regulator, NEPRA, after conducting scrutiny and public hearing, which are conducted independently for KE and state-owned entities (XWDISCOs). The authority also specifies the month during which the charge is applied in consumer bills. This FCA petition is in line with the mechanism given in KE’s Multi Year Tariff whereby changes in fuel prices, generation and power purchase mix are passed through along with certain annual adjustments.

Nepra notifies reduced FCA for September

After due process, NEPRA issued its decision on K-Electric’s petition for reduced Fuel Charge Adjustments (FCA) for the month of September 2022. The reduction is at a rate of 5.13 per unit and will reflect in consumer bills for the month of November 2022. FCAs are approved by the regulator, NEPRA, after review who also specifies the month during which the charge is applied in consumer bills.

FCA is dependent on the global prices of fuel and are passed on to consumer bills under the prescribed rules and regulations of NEPRA and the Government of Pakistan. September’s FCA was lower primarily due to a reduction in fuel prices. The price of power purchased from CPPA-G in September decreased by 37% from June 2022. Similarly, for RLNG, the price in September decreased by 13% from June 2022.

NEPRA Concludes hearing on K-Electric’s Request for September’s Reduced FCA

A public hearing was held today by the NEPRA Authority over the petition submitted by K-Electric for Fuel Charges Adjustments (FCA) for the month of September 2022. K-Electric filed a negative FCA petition for the month of September at a rate of PKR 4.622/kWh. Final approval on the FCA is subject to NEPRA’s review and approval who also specifies the month during which the charge can be applied to consumer bills.

September’s FCA is lower primarily due to a reduction in fuel prices. The price of power purchased from CPPA-G in September decreased by 36% from June 2022. Similarly, for RLNG, the price in September decreased by 13% from June 2022. For Furnace Oil, the price in September increased by 2% from June 2022.

Commenting after the hearing, KE’s spokesperson’s remarked, “Reviews for Fuel Charge Adjustments are made every month and is applicable on consumer as per the directions issued by NEPRA.” He further said, “Consumers get a benefit when fuel prices decline in comparison to the reference month. FCAs are applied after NEPRA’s scrutiny & public hearings, which are conducted independently for KE and state-owned entities (XWDISCOs).”

Revisions in power tariffs and taxes on bills

KARACHI: In line with the governing laws, rules, and regulations of the Government of Pakistan and NEPRA, various changes have been made to the rates of electricity and tariff structure that will be effective from July and applicable nationwide including on consumers in KE’s service territory. The determination of costs of electricity to be recovered from consumers across Pakistan in their bills comes under jurisdiction of NEPRA and the Government of Pakistan.

These changes include the non-extension of relief for zero-rated industries as well as the relief on peak-hour electricity consumption for industrial consumers. The retailer tax with revised slabs has been introduced for commercial consumers. Non-Time of Use residential consumers will also see a revision in their applicable tariff along with a change in the methodology for their calculation.

Protected and Unprotected Consumers

As per SRO 1004 dated 7th July 2022, the tariff rates and slab structure for tariff of unprotected non-ToU residential consumers (i.e. consumers with sanctioned load below 5kW) has changed.

“Protected” consumers, as per tariff terms proposed by GoP under its Power Subsidy Rationalization Plan and by NEPRA as those non-ToU residential consumers with monthly electricity usage of 200 units or less, consistently for the past 6 months. All other non-ToU residential consumers fall in Unprotected category.

Previously, category of unprotected consumers were provided the benefit of one previous slab in their billing (i.e. their billing was done in two slabs), which has now been removed. Consumers in the unprotected category will now only be charged on one slab in which their units fall. Accordingly, tariff rates have also been adjusted downwards to minimise impact on consumers.

Industrial Customers Bills

Industrial consumers were previously being provided a relaxation by Government of Pakistan, allowing them to utilize electricity during peak hours at the same rates as off-peak hours. That relief was allowed until June 2022 and accordingly with no further extension. Peak rates would now be applicable on industrial consumers as well.

Similarly, zero-rated (or export-oriented) industries were being provided electricity at a fixed rate of USD 9 cents/unit, which was applicable till June 2022, has now been removed. Now, these industries will be charged as per applicable tariff rates to normal industrial consumers.

In addition to the above charges, it must also be noted that routine charges under FCA will be applicable in July bills within KE’s service territory.

Retailer Tax for Commercial Consumers

Per the Government of Pakistan Finance Act 2022 applicable across the country, retailer tax on unregistered retailers have been revised and effective from 1st July 2022. For consumers on commercial tariff, a minimum fixed tax of PKR 3,000 will be charged for bills between PKR 0 and PKR 30,000. Monthly bills between PKR 30,001 and PKR 50,000 will be taxed PKR 5,000, while those with monthly bills above PKR 50,0001 will be taxed PKR 10,000.

Important to note that inactive income taxpayers will be charged twice the taxable amounts.

Further, these taxes will apply even if the consumer’s premises are not in use.

Fuel Charges Adjustments (FCA):

Unprecedented hikes in the price of furnace oil and RLNG were translating into higher costs of electricity production for utilities, and higher costs of electricity for consumers as well. Under the tariff mechanism determined by NEPRA, incremental costs of fuel are recovered from consumers in their bills via Fuel Charges Adjustments (FCA) after the regulator’s scrutiny and approval. Within the decision for FCA, regulator also states that in which month FCA is to be charged. For example, FCA of March 2022 was charged in the month of June 2022.

Accordingly, in its determination for the month of April 2022, NEPRA has allowed KE to charge PKR 5.2718 per unit for units consumed in April ’22 to be billed in the month of July 2022. Further, NEPRA has allowed the FCA for May ’22 be recovered in two parts with PKR 2.6322 per unit charged in July and the remaining PKR 6.8860 per unit in the bills of August ’22. This means customers will see two entries for FCA in their July bills i.e., FCAs for April and May, respectively.

Speaking about the changes, Spokesperson KE stated “We understand that our consumers may have a number of questions about these revisions. To assist them during this time, we have updated our website with frequently asked questions. To reiterate, these changes are introduced under the governing laws of the Government of Pakistan and the rules of the regulatory authority NEPRA and are applicable across the country.