ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday came under fire for failing to protect interests of consumers and siding with the government and power utilities in tariff determinations.
The Authority faced this unpleasant situation during a public hearing held on KE’s request for adjustment in its FCAs for May and June 2024. K-Electric has sought positive adjustments of Rs5.92 per unit (Rs2.53 per unit for May and Rs2.92 per unit for June 2024) to recover Rs10.036 billion over base tariffs under monthly Fuel Charges Adjustment (FCA). Nepra’s team, however, has revised down the FCA impact for both months after recalculation of figures in the light of reduced interest rates of 100 bps.
During the hearing some of the commentators, including a representative of Jamaat-e-Islami, demanded that entire Authority should resign for failing to protect consumers and conniving with the government and power sector utilities maintaining that Nepra has become a rubber stamp.
Discos’ consumers: Nepra notifies Rs3.33 per unit FCA for May
Another commentator, Arif Bilwani also demanded resignation of the Authority for following government’s instructions blindly sent by a Section Officer of Power Division with the approval of competent Authority.
Chairman Nepra, however, defended tariff determinations, which according to him, are finalized and approved by the entire Authority not by any single person or Chairman, adding that, Section Officer’s letter is written after a decision is taken by the Federal Cabinet.
He urged avoidance of personal comments adding that if there is any lacuna in the decision of the Authority or a wrong figure is quoted, the Authority is ready to rectify it. He said, determinations are made on the basis facts and figures which are verified by the experts of NEPRA.
Chairman Nepra also referred to the current criticism against the Authority for approval of an increase of Rs 5.72 per unit in base tariff and clarified that Discos’ request was an increase of Rs 8.28 per unit but NEPRA’s experts reduced it to Rs 5.72 per unit and saved Rs 260 billion. Later on, Power Division acknowledged that mistake.
The representative of Jamaat-e-Islami, Imran Shahid, said that on one hand, the entire country is criticising IPPs for higher tariff and capacity payments and at the same time KE is charging consumers higher than the IPPs. He demanded that generation licence of KE be scrapped and entire supply be given to the power utility from National Grid.
He also sought viewpoint of Nepra on approval of RoE to K-Electric in dollars like IPPs and non-refund of Rs 54 billion amount overcharged to KE consumers as claw back.
When one of the journalists demanded that Members of Authority should resign for failing to protect consumers of their respective provinces, one of the Members, Rafique Shaikh replied that first media representatives should resign for unauthentic news. He advised media to first go through decisions of the Authority before offering comments.
Rehan Jawed, a representative of Korangi Association, said that total amount of FCA will be of Rs 8.67 per unit i.e. Rs 3.10 + Rs 2.53+2.92 to be charged in August 2024 and after addition of tax of Rs 2.16 per unit, net effect will be Rs 10.83 in August 2024.
He suggested considering the current heat wave and the high energy bills being received by the people of Karachi, adding that the situation concerning IPPs may cause widespread concern.
Jawed further contended that the public and industries are already receiving exorbitantly high bills, and this situation could worsen if a high amount of Rs. 2.92 per unit is charged which could lead to a law and order situation.
He requested NEPRA to charge only Rs. 1 per unit for May 2024, as this is already a provisional amount that will be adjusted later.
“We suggest adjusting the remaining determined balance during the winter months when electricity consumption is lower, he added.
Responding to representative of Korangi Association, Chairman suggested that a formal request for staggering of FCA impact be sent to Nepra which would look into it in accordance with NEPRA Act.
The KE’s team headed by CFO, Aamir Ghaziani and Director Finance, Ayaz Jaffer gave a presentation to the Authority and responded to questions raised during the public hearing.
Copyright Business Recorder, 2024
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