SHC suspends Nepra’s winter package decision on KE appeal

KARACHI: Sindh High Court on Thursday suspended the National Electric Power Regulatory Authority (NEPRA) decisions with regard to federal government’s winter incentive package for electricity consumers on incremental consumption of K-Electric.

The interim order came on KE petition against Nepra decisions on incremental consumers of KE and the power utility’s subsequent appeal.

Nepra in its January 11 decision allowed KE to retain marginal cost on incremental sales and directed it to charge Rs12.96 kW/h on incremental consumption of both domestic and commercial users as per winter incentive package.

Petitioner’s counsel submitted that the decisions were “non-speaking orders” and were contrary to the record. He submitted that Nepra did not consider KE’s contentions and the reasoning given was not in accordance with the arguments raised and questions asked by the power utility company.

He submitted that both decisions by Nepra were contrary and in violation of the Nepra Act, as petitioner under garb of subsidy has been disallowed recovery of its fixed costs, operation and maintenance cost, depreciation and profit margin. This, it was submitted was despite Nepra law clearly requiring to allow recovery of any and all costs, depreciation, rate of return on capital investment etc.

The counsel submitted that under the incremental consumption package determined by Nepra, the entire subsidy was picked by the federal government; however, while continuing the same package Nepra imposed the same burden on the petitioner, which was contrary to the entire purpose of the subsidy.

He submitted that such subsidy was to be picked by the federal government rather than an entity such as petitioner, which was continuing its operation on the basis of a seven-year multi-year tariff. He submitted that the basis of impugned decisions was contrary to the scheme of tariff as provided under the Nepra Act.

The counsel submitted that Nepra has failed to consider that multi-year tariff sets sales target for a control period of seven years, whereas the decisions have confined the bench mark units to specific months and category.

This meant there would be inconsistency in the units benchmarked in the MYT versus the units benchmarked in the decisions, he submitted.

SHC division bench headed by Justice Syed Hasan Azhar Rizvi after preliminary hearing of the petition observed that points raised in the petition required consideration.

He issued notices to the federal government and Nepra for their comments.

The court in the meantime suspended the decisions of the Nepra till further orders. The counsel of the KE however undertook to repay the amount to its consumer if decisions in the petition as well as pending appeal before Nepra appellate tribunal were decided against the petitioner.