Decrease in fuel charges adjustment means 'over recovery' by company: Whistle Blower chief points out

Chairman, Whistle Blower has pointed out that a decrease in Fuel Charges Adjustment means "over recovery" by the Company. In a letter sent to National Electric Power Regulatory Authority (Nepra), on September 4, Whistle Blower's Chairman Syed Adil Gilani said that in order to protect the Company and the consumers from 'over' or 'short' recovery of tariff, an amendment was made in the Nepra Act in regard to Monthly Adjustment in the approved tariff on account of Fuel Price Variation, mandating such variations to be notified not later than seven days.
Unfortunately even after the lapse of many months, we are discussing the Monthly Fuel "Charges Adjustment for April 2014 (5 months), May 2014 (4 months) and June 2014 (3 months). Practically this delay is not in the interest of consumers and the economy of the country", he said.
The Authority, he said, is carrying out this exercise of Monthly Fuel Charges Adjustment in a mechanical way, which is most unfortunate. "In my opinion, FCA could be used as a strong and effective tool for monitoring the state and efficiency of generation of electric power in the country."
In almost all hearings of Fuel Charges Adjustment, the Commentators have asked the Authority to carry out a detailed technical and financial audit of the data submitted by the Company. Each time, the Authority confirms that its professionals carry out an audit. However, none of the Audit Reports have ever been up-loaded on Nepra's website for public inspection and verification, Adil Gilani said.
While reiterating the demand for the uploading of the Audit Reports on its website, as a consumer of this utility he requested that Nepra provided him Audit Reports of the audit carried out by its professionals during the last five years. Non provision of such reports will justify the inference that no audit was carried out in the past and Nepra wants to conceal the facts from the consumers, who are paying the tariff and suffering on account of Nepra's inaction in the matter.
After highlighting the issues which directly relate to Fuel Charges Adjustment, Chairman, Whistle Blower pointed to non-functional office of Nepra in Karachi: Although Nepra has opened its office in Karachi, the same is without relevant staff for the last so many months. Nepra's fully functional office is immediately needed in the Southern area. It is also suggested that to give relief to the consumers of K-Electric, Nepra should place its 'Complaint Drop Box' in each complaint centre of K-Electric and collect the complaints from these Complaint Boxes at least twice a week. This action will provide some relief to the consumers of K-Electric.
Referring to technical and financial audit of K-Electric, Adil Gilani said: K-Electric is the only vertically integrated utility in the country, where all three functions namely Generation, Transmission and Distribution are being carried out by a single entity. Further, it is working in the private sector. Since Generation, Transmission and Distribution are being carried out by one utility, there is need of strong technical as well as financial monitoring by the Regulator prior to deciding the cases of monthly and quarterly adjustments on account of Fuel Charges Adjustment, to prevent any chances of fake data. The technical audit of Generation data is even more important since K-Electric is using dual fuel in its BQPS-I Power Plant. Moreover, it is buying oil from BYCO and there are some complaints regarding the conflict of interest and on account of the absence of arms length transactions between K-Electric and BYCO because of their business relationship other than that of buyer and purchaser of Fuel. Technical audit of the Generation data along with physical verification of all meter including the fuel consumption meters, gas supply meters, energy meters etc are urgently and regularly needed.
Copies of the letter have been forwarded for action under rules to: Secretary to Prime Minster, Islamabad, Chairman, NAB, Islamabad, Minister of Water & Power, Islamabad, Secretary, Water & Power, Islamabad, Registrar Supreme Court Pakistan, Islamabad, and advocate Anwar Kamal, Lahore.