ISLAMABAD: The Karachi Chamber of Commerce and Industry (KCCI) has called for the direct distribution of the Winter Support Package to consumers in Karachi, bypassing K-Electric (KE), which is currently owed approximately Rs 100 billion by its consumers.
The demand was made by KCCI President Jawed Bilwani in a letter to the Minister for Power, Sardar Awais Khan Leghari. Copies of the letter have also been sent to the Chairman of Nepra and the Secretary of the Power Division.
In his letter, Bilwani refers to the federal government’s plan to introduce a new “Winter Support Package” for both industrial and residential consumers. Under the initiative, electricity is expected to be provided at Rs 25 per unit for any incremental consumption over the next six months. The business community has welcomed this proposal, but Bilwani raised concerns about the ongoing grievances faced by K-Electric consumers, largely due to KE’s refusal to pass on the benefits of the previous winter package and other relief measures announced by Nepra.
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He stated that during the COVID-19 pandemic, an incremental electricity consumption package was introduced to support industries that were severely affected. This package provided relief of approximately Rs 42 billion, but only around Rs 7 to Rs 9 billion has been disbursed so far, leaving an outstanding balance of roughly Rs 33 billion. Instead of refunding this amount, KE sought a stay order from the court.
Bilwani also pointed out that the Multi-Year Tariff (MYT) from 2009 to 2016 includes a clawback of approximately Rs 47 billion, which is meant to be refunded to consumers. However, this amount has not been released because KE obtained a stay order from the court. While KE had expressed its willingness to release the funds last year, they have yet to be disbursed.
“This is not the end of the story,” Bilwani said adding that “Nepra has imposed multiple fines on KE and advised the utility service provider to refund money to consumers. However, instead of complying, KE often challenges Nepra’s directives through legal action.”
Furthermore, the Quarterly Tariff Adjustment (QTA) is evenly distributed among all Distribution Companies (Discos) across Pakistan, including K-Electric. However, the Fuel Cost Adjustment (FCA) for KE differs from that of other Discos, which remains consistent. KCCI has recommended that the FCA should be standardised across all Discos, including KE, to ensure a uniform electricity tariff across Pakistan and address the disparity faced by Karachi consumers.
After outlining KCCI’s concerns, Bilwani emphasised that the business community strongly believes that KE owes approximately Rs 100 billion to electricity consumers in Karachi.
This amount includes the outstanding Rs 33 billion from the previous incremental consumption package, the Rs 47 billion clawback, and various fines imposed by Nepra over time.
The fines collected by Nepra have not been passed on to the consumers.
“We urge the federal government to investigate this serious issue and establish a mechanism for directly clearing the outstanding dues from the previous incremental package to consumers.
The Winter Package, which is meant for incremental consumption, should also be passed directly to consumers, rather than routed through KE. It is evident that whenever the government instructs KE to refund money to consumers, KE often challenges these directives in court,” Bilwani said.
Reiterating the points made in his letter of October 28, 2024, Bilwani has once again called on the federal government to investigate this matter and establish a mechanism to clear the outstanding dues directly to consumers.
A KE spokesperson said, “Litigation is a legitimate recourse available to all companies, including KE, to safeguard their operations from frivolous claims like the one made in the letter.
KE diligently adheres to directives and decisions within policy and regulatory parameters while ensuring the sustainability and financial viability of its operations.
It is important to clarify that every single penny of subsidy provided by the Government of Pakistan has been transparently passed on to customers by K-Electric without being withheld.
Regarding the ‘Incremental Support Package,’ KE has highlighted on multiple forums that its tariff structure is not the same as that of DISCOs and had no provision to accommodate the previous package from its own resources. KE has further confirmed that any amount released by the Government of Pakistan for the package will be directly passed on to eligible customers.
KE remains committed to complying with the honourable court’s decision in this matter.”
“In the context of standardising Fuel Charge Adjustment (FCA), KE will also align with the authority’s guidance in accordance with its regulatory obligations,” the spokesperson further added.
Copyright Business Recorder, 2024