FPA, QTA in electricity bills: SC sets aside LHC verdict

ISLAMABAD: The Supreme Court of Pakistan on Monday set aside a verdict of Lahore High Court (LHC) declaring Fuel Price Adjustment (FPA) and Quarter Tariff Adjustment (QTA) in electricity bills as illegal and without lawful authority.

A three-judge bench headed by Chief Justice Qazi Faez Isa comprising Justice Aminuddinand Justice Athar Minallah heard the petitions filed by Faisalabad Electricity Supply Company Limited (FESCO), Gujranwala Electric Power Company Limited (GEPCO), Lahore Electric Supply Company Limited (LESCO),Multan Electric Power Company Limited (MEPCO), Islamabad Electric Supply Company Limited (IESCO), and National Electric Power Regulatory Authority.

On February 6 this year, the LHC had declared that FPA, Quarter Tariff Adjustment (QTA), and change of status of tariff from industrial to commercial by Nepra as illegal and without lawful authority.

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The apex court said that the relief granted by LHC were those which were not even asked by the petitioners (consumers); therefore, the high court order is illegal, unconstitutional and unworkable.

The LHC assumed the power of regulator, federal government and the parliament, it said, adding many things touched upon by the LHC in its order were beyond the constitutional jurisdiction.

The apex court dictated a draft proposal, in the presence of lawyers of all the parties.

The chief justice said that the draft would be shared with lawyers all of all the parties after making a few adjustments in it, today (Tuesday), for approval.

According to proposed draft, the consumers will file appeals before the appellate tribunal within 15 days starting from today (Tuesday) and the tribunal shall decide the appeals expeditiously.

“Needless to say that the statutory provisions (60 days) will be abided by the Tribunal in deciding the appeals”, it said, adding “After 25 days the Tribunal shall fix the appeals for hearing, and shall not entertain adjournment”.

It further said that the parties agreed that levy charges determined by the Authority for future adjustment shall be paid by them. However, that will be subject to the decision of the appeal. Till the decision of the appeal the arrears claimed by Discos shall remain in abeyance and will be subject to the outcome of the appeal.

Salman Akram Raja, who represented some of the consumers before LHC, contended that since NEPRA was not constituted as per the amendment made in Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 on 1st December, 2021 therefore they had filed petitions before LHC, adding the basic issue before LHC was that of the constitution of the body (Nepra).

Raja told that since the appeal against the Nepra order had to be filed in 30 days, but now as due to the LHC judgment they are rendered without remedy of no fault of them, therefore they should be allowed to file the appeals before the Tribunal.

The bench observed that the high court should have provided the remedy by determining the tariff. Justice Athar Minallah stated the court could have passed the order to complete the body and it was the authority of that body to determine the electricity rate, adding no court can go into the technical issues.

The chief justice asked from the consumers’ counsel how his clients could say as the NEPRA was not properly constituted so they would not pay the electricity bills.

The Attorney General for Pakistan (ADP) Mansoor Awan contended that the petitions filed before the LHC were not maintainable as the petitioners had an adequate remedy provided under the law, and the Article 199 of the constitution stipulates that when the adequate remedy was available before a competent forum then that should have been availed.

He stated that the petitioners can file the review petition against the order NEPRA order under Section 7 of the NEPRA Act, as well as by filing an appeal under Section 12A before the Appellate Tribunal and the decision of the Tribunal is appealable before the High Court.

The LHC in its verdict also directed the government to provide a maximum subsidy to the domestic consumers of 500 units per month and not demand extra ordinary taxes having no nexus with the consumption of energy which may be recovered through other modes.

The court passed these directions in about three thousand petitions filed by domestic, industrial and commercial consumers against different charges collected through the electricity bills.

The LHC also court directed the government to explore the solar, hydel, nuclear and wind sources of producing electricity or arrange for cheap purchase of sources of electricity from other countries.

The court also asked the government to explore the cheap modes of producing electricity and evolve mechanisms for its quick availability. The court asked the government to ensure the smooth supply of electricity based on demand and not unilaterally change the type of tariff from industrial to commercial without hearing from such consumers.

The court also directed Nepra not to charge any exorbitant tariff beyond the paying capacity of the domestic consumers. The court directed the Nepra to inform the consumers about the charges on monthly basis and the fuel price adjustment shall not go beyond 07 days and the Quarter Tariff Adjustment shall not go beyond the statutory period.

The court observed that imposition of various taxes which can be recovered, otherwise, amounts to economic strangulation of the consumers.

The court said the Nepra while deciding about the tariff must keep in mind that interaction between the consumer and the producer should not be excited by the fiduciary relationship for the simple reason that to earn huge profit the performance of the producing company must increase and not the price be increased.

Copyright Business Recorder, 2023