Nepra grills Discos over proposed security deposit hike, orders audit

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) on Tuesday questioned power distribution companies (XWDiscos) over their request for a security deposit hike of up to 3,260 per cent and announced an audit of existing deposits held by these companies.

During a public hearing on the petitions of the power companies, stakeholders strongly opposed the drastic increase, arguing that with a default risk of only three per cent, burdening approximately 35 million consumers was unjustified.

Eight XWDiscos—Peshawar Electric Supply Company (PESCO), Multan Electric Power Company (MEPCO), Gujranwala Electric Power Company (GEPCO), Lahore Electric Supply Company (LESCO), Faisalabad Electric Supply Company (FESCO), Hyderabad Electric Supply Company (HESCO), Quetta Electric Supply Company (QESCO), and Tribal Areas Electric Supply Company (TESCO)—filed petitions seeking revisions to align security deposits with rising electricity costs.

The proposed security deposit increases varied, with MEPCO requesting the highest hike of 3,260 per cent for small industries, raising deposits from Rs1,580/kW to Rs53,073 for 2.5 months. Urban domestic consumers faced an 1,100 per cent hike, while rural consumers were set to see over 2,000 per cent hike. The lowest proposed increase—83 per cent—was for agricultural tube wells, from Rs15,000 to Rs27,514.

The Power Division noted a 400 per cent rise in electricity tariffs since 2010, justifying the deposit hikes. However, Nepra Member Rafiq Shaikh criticised the absence of Power Division officials at the hearing, calling the Discos’ presentation “very poor”.

Shaikh lambasted the companies for demanding guarantees from consumers while failing to ensure uninterrupted supply. “Consumers suffer 15 to 20 hours of load-shedding. In Karachi, K-Electric kept a feeder down for three days over unpaid bills. What recourse do consumers have?” he asked.

Another Nepra Member, Maqsood Anwar, questioned why all consumers should bear the cost of a few defaulters. Concerns were also raised over the flawed deposit estimation method, including linking it to land value. A Disco representative admitted they were instructed by the Power Division to submit the request. Nepra warned that the proposed hike could push more consumers toward solar power. While Discos suggested collecting the security deposit in 12 installments, Nepra questioned why a debt servicing surcharge was imposed despite surplus funds in accounts. Nepra has reserved its decision, stating that an audit of existing security deposits will be conducted before any judgment was issued.