SC annuls LHC decision on FPA in power bills

ISLAMABAD:

The Supreme Court (SC) on Monday overturned a Lahore High Court (LHC) judgment declaring illegal the practice of applying the fuel price adjustment (FPA) to monthly electricity bills.

A three-member bench led by Chief Justice Qazi Faez Isa proclaimed the LHC ruling “impractical both constitutionally and legally” while hearing an appeal of the power distribution companies (DISCOs) against the decision.

The bench noted that the Appellate Tribunal of the National Electric Power Regulatory Authority (Nepra) was the appropriate authority to handle this intricate matter and not the LHC.

It directed the petitioners to file an appeal before the Nepra Appellate Tribunal within the next 10 days.
The tribunal, in turn, was directed to expedite the hearing and reach a decision within the statutory timeframe.

During the proceedings, Advocate Salman Akram Raja, representing the DISCOs, argued that the formation of Nepra itself was unconstitutional when the FPA was initiated in May 2022.

Read NEPRA faces scrutiny over electricity costs, capacity

CJP Isa challenged this stance, emphasising that if there were constitutional concerns about Nepra's formation, they should have been addressed separately.

Justice Athar Minallah, the other judge on the bench, clarified that neither the SC nor any other court had jurisdiction over the technical matters of Nepra.

The LHC decision, in this context, was perceived as overstepping its boundaries.

The attorney general affirmed that both Nepra and DISCOs were open to resolving the matter through the appropriate forum.

The apex court also directed that the outstanding dues from companies and industries following the LHC’s initial decision would now be subjected to the Nepra Appellate Tribunal's verdict.

LHC verdict

In February, the LHC had declared the FPA in electricity bills as illegal, observing that the demand for FPA, quarter tariff adjustment and change of status of tariff from industrial to commercial by Nepra did not constitute fully under Section 3 of the Nepra Act, 1997.

LHC's Justice Ali Baqar Najafi had disposed of more than 3,000 petitions challenging the authority’s mandate, directing respondent Nepra not to charge any exorbitant tariff beyond the paying capacity of domestic consumers.

He had also directed Nepra to provide maximum subsidy to domestic consumers using up to 500 units per month.