ISLAMABAD: The Supreme Court set aside on Tuesday a high court verdict and allowed the Peshawar Electric Supply Company (Pesco) to recover fuel adjustment charge (FAC) from its consumers.

A three-judge bench headed by Chief Justice Tassaduq Hussain Jillani also granted leave to appeal to Pesco which had challenged the Dec 17, 2013 verdict of the Peshawar High Court declaring the FAC on electricity bills by the National Electric Power Regulatory Authority (Nepra) as unconstitutional and illegal.

After the suspension of the PHC judgment, Pesco can now recover arrears in 10 monthly instalments from its consumers.

The Supreme Court summoned Attorney General Salman Aslam Butt with an observation that since interpretation of Articles 57 and 161(2) of the Constitution was involved and the high court had ruled the Nepra Act illegal without hearing the attorney general, it was necessary to issue a notice to him under Order 27 of the Supreme Court Rules 1980.

About 75 industrial units and other entities had challenged the FAC in the PHC which ordered Pesco to adjust through monthly bills the extra amount it had received from consumers under the FAC.

In its appeal filed by Advocate Munawar-us-Salam, Pesco argued that the Supreme Court had already decided most of these issues in the Gadoon Textile Mills case in 1996 and held that electricity generated through hydel resources became part of the national grid from where it was distributed across the country and the Khyber Pakhtunkhwa government received a net profit on it.

Pesco said the high court had not appreciated the fact that electricity was transmitted across the country through the grid system of National Transmission and Dispatch Company and distributed by Discos (distribution companies) which could only charge tariff approved by Nepra and notified by the federal government.

“The power to determine tariff, rates and charge is specifically conferred by the Nepra Act and Regulation 6 of the National Electricity Power Regulation Authority Licensing (Distribution) Rule 1999 and Nepra (Tariff Standards and Procedure) Rules 1998,” it added.

Pesco argued that recovering FAC from KP consumers was in no manner discriminatory and did not violate any fundamental right of consumers because it was being charged across the board for all consumers of Discos.

Therefore, it said, the PHC ruling had failed to note that non-recovery of the FAC from KP consumers duly determined by the competent authority would affect the entire power sector on account of lack of funds and subsequently of fuel which might halt generation of electricity.

Pesco explained that FAC was an ingredient in the final cost of electricity and also in accordance with the law. “If the high court judgment is implemented, it will result in non-recovery of the cost and consequently destroy the power sector, particularly the distribution segment,” it argued.