The interveners of Karachi Electric Supply Company's (KESC) petition for fuel adjustment, tariff revision and security deposits, rejected the company's demands terming them "unjustified" in a public hearing which National Electric Power Regulatory Authority (Nepra) organised on Wednesday.
Interveners who participated in the public hearing held here at Nipa Hall were an industrialist, Aarif Bilwani, Secretary Site Association, Akhter, Shamim Ahmed from Karachi Chamber of Commerce and Industry and Chaudhary Mazhar Ali, Secretary KESC Share Holders Association (SHA) with the officials of Nepra and KESC.
Through a petition, No DDRA&SP/ET040 dated January 5, 2010; KESC had appealed the authority to revisit its determinations of the company's tariff petition for increase in base tariff and modification of terms and conditions of electricity supply and security deposit rates.
While terming the company's request for fuel adjustment as unjustified, Arif Bilwani, said the company was not buying the required furnace oil, and is running its power generating units on gas. Besides, he said the company was also getting subsidy from the government to adjust the fuel cost. Zulfiqar Haider Ali, Director Projects of KESC, who in the absence of the company's CEO represented the public utility, said that the company was not getting the subsidy on the basis of fuel adjustment but for the strategic localities, where the load shedding was minimal or even exempted.
Shamim Ahmed also questioned the company's decision to abstain from purchasing fuel, which, according to Ahmed was cheaper in cost. However, Zulfiqar said that KESC had purchased the fuel as per requirements. Responding to KESC's plea for the increase in security deposits as equal to two month's electricity bills of the applicants and as per the connected load, Nepra's representative said that the authority has already fixed the deposit as per one month bills for other DISCOs.
Interestingly, while rejecting the company's request Chaudhary Mazhar, said that the company in 2003 had already applied for reducing the deposits saying that it would discourage the legal power connections. He said that KESC presently has deposits of over Rs 4 billion with only five percent interest being given to the depositors. The company's plea for increasing the deposits, he said, was for business purpose only and to meet its financial crisis.
To meet the liquidity crisis, he said, KESC should control power theft that was mostly done in connivance with company's own employees. He said the company that demands deposits and other facilities similar to that of Wapda, should also bring similarities in salaries and perks of the company's officials. The meeting also observed uproar when the representatives of KESC, also started responding loudly to Chaudhary.
However the Nepra officials, interrupting the discussion suggested the secretary SHA to write the details to the authority and Securities and Exchange Commission of Pakistan (SECP). The interveners and KESC also exchanged comments over company's demand for increasing in the O&M component of tariff and allowing it a further increase of Rs 0.43 / kWh over and above the recently allowed increase of Rs 0.15 / kWh.
The company has demanded the hike in tariff while making following issue as grounds: the increase in operation and maintenance (O&M) component of current tariff, increase in fuel & power purchase component of current tariff, resetting of transmission and distribution losses, removal/deferral of claw back mechanism, modifications in terms and conditions and determination of rates for security deposit. Reconsidering the demand of KESC, Nepra had arranged the public hearing.
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