NEPRA orders inquiry into power rate hike demand

Regulatory cracks down on overbilling scam

ISLAMABAD:

 

 The National Electric Power Regulatory Authority (NEPRA) has initiated an inquiry into the operations of Power Distribution Companies (Discos) following their request for a Rs7.13 per unit increase in electricity rates for the month of January 2024 under the fuel adjustment mechanism.

During a hearing on Friday, NEPRA Chairman Waseem Mukhtar expressed concerns over the demand, noting that there were no changes in fuel prices and exchange rates.

Mukhtar, alongside members Engineer Maqsood Anwar Khan and Rafique Ahmad Shaikh, delved into the details of the Central Power Purchasing Agency (CPPA)'s petition.

The regulatory voiced serious concerns about the hefty proposed increase, attributing it to systemic deficiencies within distribution companies.

NEPRA's scrutiny revealed irregularities in load-shedding patterns across regions, raising doubts about the authenticity of the proposed adjustments, despite claims of low power demand.

Furthermore, NEPRA drew attention to a backlog of pending power connections, amounting to 550 MW, criticising Discos for their inability to justify previous claims made during hearings.

With 160,000 pending connections in Discos, Chairman Mukhtar underscored NEPRA's commitment to accountability, announcing plans for a comprehensive investigation into Discos' operations under the 27A of the NEPRA Act.

In addition to seeking an increase in rates, distribution companies are also looking to impose a burden of Rs26.7 billion on consumers in a single month, citing transmission system stability issues.

Meanwhile, member Rafique Ahmad Shaikh questioned the petitioner about the substantial claim, particularly regarding challenges in the South-North transmission corridor over several years.

The petitioner clarified that the issue stemmed from system stability rather than constraints.

The ongoing situation demands urgent attention and a proactive approach from the government, economy, and the power sector, stated Mukhtar, urging the Power Division to devise effective strategies to mitigate the prevailing challenges.

The NEPRA chief emphasized the imperative for tangible solutions to prevent further escalation of prices and demand, cautioning against perpetuation of the current cycle.

In light of stable fuel prices and exchange rates, NEPRA admonished the power division against unfounded claims, signalling a departure from previous leniency towards such requests.

The chairman concluded by reaffirming NEPRA's commitment to serving both the government and consumers, asserting a zero-tolerance policy towards failures in power provision and urging proactive measures to address systemic inefficiencies.
The NEPRA's decision marks a significant step towards enhancing transparency and accountability within Pakistan's power sector, as stakeholders work towards sustainable solutions to meet the nation's energy needs.Directive against excessive billings scamMeanwhile, the NEPRA issued directives on Friday to power distribution companies to take action against officials involved in an overbilling scam.

The move comes following a NEPRA inquiry in December 2023, revealing that not a single distribution company had carried out correct billings.

The inquiry disclosed that over 13 million consumers were charged for more than 30 days of electricity usage, while 0.4 million consumers received average bills due to faulty meters.

However, the power division had contested this inquiry, claiming that only 0.2 million consumers were overcharged.
NEPRA, standing firm on its inquiry claims, issued directives to XWDiscos and K-Electric to address consumer issues and take action against those involved in the overbilling scam. These companies failed to provide a satisfactory reply to the inquiry report following widespread complaints in July-August 2023.

NEPRA issued directives to these companies including K-Electric to implement NEPRA’s inquiry report’s recommendation.
According to Nepra’s inquiry report published in December 2023, K-Electric is the only company found using handheld devices for meter readings, which are an effective solution for ensuring transparency in the meter reading and billing process.

The report also found that K-E’s monthly billing cycles follow the regulatory guidelines and has observed no lapse from the company in this regard.

The inquiry report also shows that no customers were found to have been fleeced by a change of slab or deprived of their protected or lifeline status due to an error by K-E in meter reading.

In response to widespread complaints and irregularities in electricity billing practices, the regulatory has issued a comprehensive directive to distribution companies outlining steps for immediate rectification.

It directed DISCOs to adhere to recommendations outlined in the Inquiry Report and GOP inquiry report, particularly focusing on the replacement of defective meters older than two months (July and August 2023).

Consumers will now be charged based on actual readings instead of excessive or averaged bills, ensuring fair billing practices.

DISCOs were instructed to collaborate with the Power Information Technology Company (PITC) to review inflated bills dating back to June 2023.

This review aims to rectify billing discrepancies, especially for protected/lifeline consumers who may have been wrongly categorised due to billing cycle extensions beyond 30 days.

The directive also addresses accountability, requiring DISCOs to take disciplinary action against officers found in violation of regulations. Specifically, HESCO, SEPCO, TESCO, and PESCO are mandated to scrutinise unrecovered detection bills from July 2018 to June 2023 for accuracy and initiate recovery procedures where necessary.

Furthermore, Discos are reminded to strictly adhere to the Consumer Service Manual (CSM) and tariff terms, including meter readings within 30-day billing cycles and accurate issuance of detection bills. Education on relevant regulations and consumer eligibility criteria for Disco officers is also emphasised.

DISCOs are given a one-month deadline to rectify identified discrepancies and submit a compliance report to the regulatory authority. Failure to comply may result in the Authority initiating legal proceedings under relevant regulations.