SC to give judgement on power tariff increase by Nepra
23 October, 2013
ISLAMABAD: The Supreme Court has decided to give judgment regarding the process of NEPRA in connection to determining power tariff.
Likewise, SC judge Justice Gulzar Ahmad made it clear that NEPRA's recent notification about raising power tariff had no legal backing.
A three-member bench of the apex court, headed by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry expressing dissatisfaction over the NEPRA's procedure about the determination of power tariff, sought the complete record of public hearing regarding the increase during the month of August as well as October.
The court also issued notice to attorney general to appear before the court on the next date of hearing.
The bench asked chairman NEPRA to inform it as to whether stakeholders were given opportunity to participate in process of reconsideration of determination of power tariff or the decision was taken unilaterally.
It also raised question that how the NEPRA could increase power tariff without giving opportunity to the stakeholders to participate in the process.
The court also suggested the chairman NEPRA to engage a counsel in this case as they would give a judgment regarding its process about determination of power tariff.
During the hearing, Chairman NEPRA Khawaja Naeem failed to satisfy the bench about the procedure in determining power tariff.
The chief justice asked the chairman NEPRA that how the government could intervene in NEPRA affairs. He said that process about the determining the power tariff should be transparent as they would not allow monopoly of anyone in this regard.
The CJP also observed that the government had put all the burden of line losses on consumers, who were regularly paying electricity bills.
The chief justice observed that electricity generated from oil and gas could not cost equally and directed the regulatory authority to chalk out a mechanism to determine electricity tariff. He also noted that electricity which was generated through gas should cost less to consumers and its price should also be different from oil-generated electricity.
Chairman NEPRA told that power authority always determined the power tariff of companies differently as IESCOs was the most sufficient company; therefore its tariff rate was lower as compare to other companies.
He also admitted that the government was providing subsidy to inefficient companies. He contended that NEPRA did not increase power tariff but also the government had withdrawn subsidy over electricity.
Naeem also informed that NEPRA was trying to give relief to poor people as 30 to 40 percent consumers were using less then 50 units and the government was receiving Rs 2 per unit from them.
Meanwhile, MD PEPCO Zargham Ishaq Khan told the bench that the total power generation at present at peak hours stood at 13,000 Mega Watts while 12,800 MWs was during off-peak hours. He, however, said the required power generation was 14,300 MWs during peak hours.
Referring to the recovery of outstanding electricity dues, Khan told the court that every distribution company was required to recover the outstanding dues. When the chief justice asked him as who refused to recover the outstanding dues and replied there were different consumers.
MD PEPCO further said at present some Rs 460 billion was outstanding for recovery of electricity bills including Rs 280 billion of private sector. He, however, said the industrial sector appeared as the good paymaster, adding that about 92 percent recovery was being made from the industrial sector while commercial sector recovery was 85 percent and domestic consumers at 75 percent. He further said that numerous ways were being adopted for recovery of electricity bills.
The bench asked him that why the government was not deducting at source the value of power theft in each province from the share in the divisible pool of the National Finance Commission (NFC) Award. In reply, he said the provinces had refused to accept this proposal.
Regarding the issuance of illegal CNGs licenses, the court again directed the director general FIA to submit inquiry report on the next date of hearing. Likewise, the FBR told the bench that out of 3,495 CNG stations, 1,869 were paying taxes. The hearing of the case was adjourned till November 6.