Prime Minister Shahbaz Sharif recently announced a Rs 50 billion relief package for domestic consumers using up to 200 units of electricity a month. Muhammad Usman, a resident of Babuwala, Faisalabad, finds himself excluded from this relief due to alleged overbilling by the Faisalabad Electric Supply Company.

Usman reports receiving a Rs 8,140 bill for using 202 units in June. He says his electricity consumption has been consistently below 200 units for the previous 11 months. The ‘overbilling’s has moved Usman from the protected to the unprotected consumer category so that he will have to bear additional charges for the next six months. Under current regulations, if a consumer’s bill exceeds 200 units in any month, they are classified as unprotected for the following six months.

Usman alleges that the FESCO overbills many consumers to make up for its line losses and power theft. This complaint highlights a broad concern. The FESCO is accused of generating millions of rupees through overbilling. Meanwhile, over 10,000 active and 12,000 retired FESCO employees receive 40 million free units annually. According to FESCO spokesperson Tahir Mehmood Sheikh, the cost of electricity for FESCO employees is covered by the operation and maintenance budget.

In an attempt to address the overbilling complaints, the FESCO has recently implemented ‘pro-rata’ software to send bills based on average readings over 30 or 31 days. Despite this new system, Usman remains in the unprotected category and obliged to pay more than twice the amount he would owe as a protected consumer.

FESCO spokesperson Sheikh admits that around 14,000 customers were wrongly excluded from the protected category in June. He says corrected bills have been issued to the affected customers. Those who have already paid the inflated bills will receive relief in their next month’s bill.

Allegations of overbilling by the FESCO have been substantiated by information obtained under the Right of Access to Information Act 2017 and an inquiry conducted by the National Electric Power Regulatory Authority.

The NEPRA report revealed that, in July and August of the previous year, the FESCO issued bills based on more than 30 days of consumption to approximately 1.2 million consumers. Of these, around 300,000 consumers faced increased costs due to a change in their billing slab caused by the excess readings. 52,605 consumers suffered by being moved from the protected to the unprotected category. Those affected included 914 lifeline customers, who consume less than 50 units of electricity, but were wrongly categorised as non-Lifeline customers.

Additionally, the NEPRA confirmed that 9,706 consumer bills lacked photographs of meter readings, raising concerns about billing accuracy. The FESCO’s accountability of its employees remains slow and ineffective. Information obtained under the RTI law revealed that, in the past five years, only seven meter readers have been investigated for bogus or incorrect meter readings. None of the investigations has been completed.

While departmental actions were initiated against 40 employees involved in electricity theft over the past five years, most cases remain pending or have resulted in minor punishments and fines, allowing these officials to be reinstated.

On the consumer side, more than 51,000 customers have been issued detection bills totaling more than Rs 2 billion for alleged electricity theft. The NEPRA says that the DISCOs, including the FESCO, are overcharging consumers through detection bills.

With negligible action taken against the FESCO officials involved in overbilling and electricity theft, the entire financial burden is passed to the consumers.

Overbilling is not confined to the FESCO. The problem affects other distribution companies too. According to a report by the NEPRA, in July and August last year, nine DISCOs overbilled more than 13.7 million consumers.

The affected consumers included 7,990,319 from the MEPCO, 1,655,422 from the GEPCO, the 1,336,048 from the LESCO, 1,198,962 from the FESCO, 730,105 from the HESCO, 313,596 from the PESCO, 164,987 from the QESCO, 45,850 from the IESCO and 326,249 from the SEPCO.

Amir Naveed Chaudhry, a senior journalist from Lahore who specialises in reporting on DISCOs, says that according to the recent NEPRA investigation, 326,350 protected consumers were affected by the implementation of the ‘pro-rata’ billing system last month. Of these, 62 per cent belonged to the four distribution companies providing electricity in the Punjab. This included 49,795 consumers from the LESCO, 27,645 from the FESCO, 62,765 from the MEPCO and 63,265 from the GEPCO.

The discrepancy between the claims of DISCO spokespersons and the consumers’ accounts underscores a critical need for transparent and accountable billing practices. The NEPRA should exercise strict oversight and ensure that consumers are not unfairly burdened.

Chaudhry explains that the NEPRA had conducted an inquiry into overbilling last year, leading to the introduction of the ‘pro-rata’ system by DISCOs this year to mitigate overbilling allegations. However, the transition has managed only to transfer the blame for overbilling to the new software while maintaining the same meter reading system.

“Under the pro rata system, consumers were billed for days they had not yet consumed electricity, causing many to move from the protected to the unprotected category,” Chaudhry notes. He says that meter readers, who are tasked with reading an average of 4,000-5,000 meters in 30 days, post these readings in a batch-wise system daily. Instead of issuing bills for the actual 30 days, the Pro-Rata system created bills by counting the month from the 1^st to the 30^th. This resulted in additional days being added to the bill if, for example, the meter was read on the 20^th.

He claims that the flawed implementation of the pro rata system not only overbilled protected consumers but also caused significant financial losses to consumers using 300 or more units due to slab changes. Chaudhry says that the failure of the DISCOs to properly synchronise the meter reading system and software has exacerbated the problem.

The controversy over overbilling continues to embroil various electricity distribution companies across Pakistan, with conflicting claims from company spokespersons and widespread discontent among consumers.

Rai Masood Ahmed, spokesperson for the Lahore Electric Supply Company, says that no consumer under the LESCO has been overbilled under the pro rata system. He states that, while meter readers previously had the flexibility to adjust billing days for personal gain, the introduction of software-based billing has eliminated this possibility. However, most consumers remain sceptical.

Jamshed Niazi, a spokesperson for the Multan Electric Power Company, acknowledges that around 49,000 protected customers were affected by overbilling. Rana Bilal Ahmad, a journalist from Multan, says that the actual number of affected citizens exceeds MEPCO’s disclosure. He says no relief has been provided and the affected customers have been told that an inquiry is ongoing and that relief would be granted in the next month’s bill if overbilling is confirmed.

Rana Jahangir, a spokesperson for the Gujranwala Electric Power Company, insists that there were no complaints of overbilling from the GEPCO customers. However, this assertion is contradicted by a NEPRA inquiry from last year, which revealed that the GEPCO had overbilled more than 1.655 million customers.

Shahbaz Khan, a journalist from Gujranwala, corroborates these findings, stating that the GEPCO frequently sends bills based on average readings without actual meter readings, leading to a surge in overbilling complaints.

Khan says that the implications of overbilling are severe, with many consumers being forced to sell valuables to pay inflated electricity bills. The government’s response, focused on conducting inquiries, has been criticised for failing to take immediate action against the DISCOs responsible for these practices.

The discrepancy between the claims of DISCO spokespersons and the consumers’ complaints underscores a critical need for transparent and accountable billing practices. The NEPRA must exercise stricter oversight and ensure that the consumers are not unfairly burdened.

Amir Naveed Chaudhry says overbilling in Pakistan’s power sector has persisted since the power transmission system was transferred from the Water and Power Development Authority to various distribution companies. While consumers previously had greater tolerance for overbilling, the soaring cost of electricity has made it increasingly difficult for them to manage even their actual bills.

Chaudhry attributes overbilling primarily to the targets set for the DISCOs at the beginning of each financial year. To meet financial targets, especially as the fiscal year closes in June, the DISCOs often overbill their consumers to show reduced losses. This practice, he notes, is particularly prevalent in the Punjab due to the higher bill payment rates compared to other provinces. Consequently, consumers in the Punjab bear the additional financial burden of unpaid bills from other regions.

The NEPRA has corroborated these issues in its annual performance evaluation report for 2022-23. The report, available on the NEPRA website, reveals that electricity distribution companies incurred losses of Rs 166 billion in power transmission and distribution and Rs 263 billion in recovery. Additionally, the report criticises the distribution companies for failing to meet the targets of providing affordable, reliable and sustainable electricity services under Section 27A of the NEPRA Act. The primary causes identified include a lack of reforms in the power sector and poor performance by the DISCOs.

To address the systemic problem of overbilling, Chaudhry recommends eliminating unrealistic targets for the DISCOs. He says no distribution company can entirely eliminate transmission and dispatch losses or ensure 100 percent recovery under current pressures. As long as these unattainable targets persist, overbilling will remain an issue.

The NEPRA report also advocates for improving the efficiency of distribution companies through privatisation under public-private partnerships. This approach could involve dividing the companies into smaller units or transferring control to provincial authorities.

Despite the damning NEPRA report last year, the Power Division dismissed its findings as suspicious. No action was taken against the overbilling practice. Now, Prime Minister Shahbaz Sharif has initiated another investigation into the DISCOs’ overbilling practices and signalled potential actions against those responsible. Had the NEPRA report been acted upon previously, millions of consumers like Muhammad Usman might have been spared the burden of overbilling this year.

Overbilling in Pakistan’s power sector underscores the urgent need for regulatory reforms and realistic operational targets for the DISCOs.

The writer has been associated with journalism for the past decade. He tweets

@ naeemahmad876