THURSDAY JANUARY 01: Overbilling in three months: Nepra chief sees 'some other factors'

ISLAMABAD: Chairman National Electric Power Regulatory Authority Brigadier Tariq Sadozai (retired) on Wednesday stated that "some other factors", in addition to slabs' change, are behind overbilling in June, July and August 2014. Briefing the Senate Standing Committee on Water and Power, headed by Senator Zahid, Khan, the newly-appointed Nepra chief said that the regulator had approved Discos tariffs in FY 2010-11 but the government notified it in October 2013 after the Supreme Court of Pakistan abolished schedule -II.
"Government notified Nepra's determined tariff after almost three years starting from October 2013 but the impact of new slabs was negligible on tariff in November, December 2013 and January to May 2014. The committee should investigate why all of a sudden consumers' tariff increased in June, July and August 2014," he added. The committee maintained that the government over-billed consumers by Rs 70 billion in three months. Some officials informally pointed fingers at the Finance Ministry which allegedly tailored this plan. However, Nepra representatives present in the meeting were not ready to say anything on record on tariff manipulation.
Although, Chairman Nepra who has been involved with the power sector for the last 9 years showed his lack of understanding of how the sector operates. Chairman Nepra stated that Nepra determines tariff on the basis of data provided to it by the CPPA and it is the government that decides the amount of a subsidy.
Commenting on the imposition of 60 paisa per unit surcharge, Additional Secretary Ministry of Water and Power, Omar Rasool insisted that Nepra determined fuel price adjustment (FPA) is in accordance with prevalent rules but the government is empowered to impose a surcharge to lower the volume of subsidy being given to consumers. Senator Nawabzada Saifullah Magsi, Senator Nisar Muhamand and Senator Mrs Khalida Parveen grilled the officials of Water and Power Ministry and Nepra on the issue of overbilling.
After hectic deliberations, the committee declared overbilling illegal and recommended that Nepra should restore tariff slabs prior to the position of 2010-11 and adjust the over- charged amount. Documents presented by the Hyderabad Electric Supply Company (Hesco) to the committee disclosed that GoP is extending a subsidy to consumers in the following manner: 1-50 units - Rs 2 per unit, 1-100 units - Rs 9.21 per unit, 101-200 units - Rs 9.13 per unit, 201-300 units - Rs 5.15 per unit, 301-700 units - Rs 2.50 per unit and 701- above - Rs 2.50 per unit.
According to Hesco, in the billing months of July and August 2013 the rate of domestic tariff slab of 101-300 was Rs 8.11 per unit while it was bifurcated into two slabs - 101 to 200 and 200-300 units per month. All slabs admissible in previous tariff have been withdrawn and only one previous slab benefit was allowed from October 2013.
During a discussion on Golan Gol Hydropower Project, Chairman Water and Power Development Authority (Wapda) Zafar Mehmood assured the committee that the entire team deputed on the project is being replaced to expedite work. He also assured the committee that action will be taken against the official who misbehaved with Senator Nisar Muhmand during the latter's site visit. Member Water (Wapda) apprised the committee that work on the project will restart after an international team arrives on January 2014. He said issues related to wielding size, etc, have already been sorted out. Chairman Wapda appreciated the inquiry report by Senator Nisar Mohmand on issues related to Golan Gol Hydropower Project.
Giving briefing on Naulang Dam in Jhal Magsi, Chairman Wapda said that fresh bids are being invited for the project on the basis of a revised PC-I at a cost of Rs 22 billion. He argued that M/s Descon had submitted a bid of Rs 28 billion against a revised PC-I of Rs 18 billion approved by ECNEC in 2012 but the Planning, Development and Reforms Division did not allow cost escalation of more than 15 per cent. Since Planning Commission does not allow a more than 15 per cent cost over-run from the PC-I, Wapda has decided to submit a revised PC-I. Nawabzada Saif Ullah Magsi urged Wapda to complete all codal formalities so that construction of dam can commence.
Chairman Standing Committee observed that the government is not giving full attention to hydropower projects which are not only source of cheap electricity; but these also mitigate chances of losses in floods. Chairman Wapda acknowledged that timely provision and release of funds is necessary for every project and most of the issues have been resolved. He said funds have been released for Munda Dam with the help of Planning Commission.
He further stated that funds are being arranged from Neelum Jhelum Hydropower Project and Dasu Dam. Additional Secretary Economic Affairs Division (EAD) informed the committee that negotiations with different donors are under way for hydropower projects, and EAD is hopeful that funds will be made available to all the projects. Chairman Wapda also requested the committee that Planning Commission's officials should be summoned to the next meeting of the committee so that Rs 4 billion funds for Darwat Dam in Sindh should be released.