ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has raised over a dozen questions on KE’s write-off claims of Rs 68 billion from FY 2017 to FY 2023.
The Authority has decided to hold a public hearing on the issue on November 21, 2024, to hear the viewpoint of consumers’ representatives on the proposed claims to be recovered from them. The top management of the power utility company will respond to the questions framed by the Regulator and consumers.
This issue is one of the key agenda items of KE and Saudi Arabia’s Aljomaih Group, whose Managing Director of Investments Abdulaziz Hamad Jomaih visited Pakistan last week as a member of a high level delegation of company heads who intend to invest in Pakistan. K-Electric was allowed to claim write off for the control period of MYT, ie, FY 2016-17 to FY 2022-23.
August FCA: Nepra approves over 40 paisas provisional positive adjustment for KE
The Nepra has framed the following issues, to be responded by the power utility company during the public hearing: (i) Whether KE can claim write off for the period prior to FY 2016-17? (ii) K-Electric was allowed to deduct provision for doubtful debt from the profits in some years while calculating claw back, resulting in lower amount of claw back.
Can K-Electric claim the same doubtful debt as write off again? (iii) K-Electric was allowed a varying margin of law and order during the control period with 5.2% in base case to cover losses of hook connections.
Can K-Electric claim non-recovery of bills issued against hook connections while hook connections were disallowed in earlier MYT? (iv) K-Electric was required to make all best possible efforts to recover the amount being written off.
However, K-Electric has not done any legal proceeding for recovery of bills less than Rs. 10 million as per available framework. Is it justified legally? (v) NEPRA determined tariff does not account for duties and taxes on bills. However, K-Electric has claimed write off amount including taxes and duties of defaulting consumers.
Can K-Electric claim amount of taxes and duties on the unpaid bill in the write off case? (vi) Is K-Electric required to observe provision of consumer service manual in connection, disconnection and re-connection/recoveries related to write off cases? (vii) can bills only a few months old be claimed as under recoveries/write offs? What should be the duration? (viii) Is K-Electric required to provide CNIC no. of the consumers who have defaulted on payment of bills and being claimed in the write off? (ix) Can K-Electric claim write off for the consumers who defaulted on payment and their connections were reconnected without recovery of outstanding bills? (x) Can KE claims non recovered bills which are for supply of electricity for more than two months as electricity is required to be disconnected after default of two months and equipment is required to be removed after 3 months? (xi) the terms of reference of write off are not approved by NEPRA though the amount will be charged to the consumers or will be picked up by GoP as subsidy. Can K-Electric now and in future claim write offs based on terms approved by its board of directors and not vetted/approved by NEPRA and NEPRA shall add this in tariff automatically? (xii) Whether K-Electric be allowed benefit of a cost/under recoveries compensated earlier once again through write-off? (xiii) K-Electric in its write-off claims has included amounts relating to discount scheme being offered by K-Electric to its defaulting consumers corrections of bills/detections bill etc. Can K-Electric claim the discounts offered or correction of bills/detection bills to consumers as write-offs? and (xiv)Any other issue that arises during the proceedings with the approval of the Authority.
KE has sought NEPRA’s nod on Licence Proposed Modifications (LPM) in its transmission licence, saying that it is adding 500/220 kV KANNUP-Karachi Intercon-nection (KKI) Grid and associated 20 KV transmission lines in transmission licence.
KE further stated that impact on tariff due to addition of KKI Grid is already inbuilt in the tariff, hence there will be no additional impact on tariff due to the proposed addition.
The project will increase the interconnection capacity of KE with National Grid, thus enabling it to off-take additional power from the National Grid.
Copyright Business Recorder, 2024
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