KESC asks govt not to act on finding

Published Dec 07, 2012 02:41am

“The KESC has made serious objection to National Electric Power Regulatory Authority’s lack of compliance with due process and relevant procedure set out in the Nepra act” — File Photo

ISLAMABAD: Challenging an order of the power regulator to recover mistakenly overcharged amounts to Karachi’s power consumers for the past three years, the Karachi Electric Supply Company has asked the government to “avoid making any statutory notification” to compensate consumers or to adjust subsidy payments by the government.

The KESC said the issue was legally time-barred now and hence could not be reopened.

“The KESC has made serious objection to National Electric Power Regulatory Authority’s lack of compliance with due process and relevant procedure set out in the Nepra act” and related regulations.

“In the meantime until this issue is resolved in accordance with due process, please avoid from making any statutory notification with regard to the alleged corrigendum,” the KESC said in a letter to the ministry of water and power.

Nepra had earlier admitted it made an inadvertent error in the schedule of tariff for KESC for July 2009 – March 2010 that had become a basis for subsequent tariff increases until March 2012.

It issued a corrigendum last week to correct wrongful calculations in the KESC tariff and asked the ministries of water and power, finance and privatisation to notify adjustments in the Gazette of Pakistan, make adjustments in electricity bills and subsidy payouts accordingly.

The initial overcharging to the consumers was estimated at Rs4.2 billion for the July 2009-March 2010 period.

In a separate letter to Nepra, the KESC revealed that a 14.3 paisa per unit erroneous charge was additionally built up in electricity consumers of Karachi, but said almost an equivalent expenses of 14.6 paisa on different heads were not allowed by Nepra and hence the extra charges had already been set off.

The KESC, however, said nothing stated in the letter constituted an admission of liability whether expressed or implied on behalf of KESC or its officers.

The KESC criticised the regulator over “the summary manner in which Nepra has made its unilateral decision” about the inadvertent error in the calculation of tariff for four consumer categories.

The original calculations, it said, were communicated and notified after public hearing in April 2010 by the regulator itself.

It said that while issuing a correction, Nepra did not comply with due process and arbitrarily and “without just cause reopened issued which in KESC’s opinion had already attained finality through lapse of time”.

More so, Nepra did not issue any show-cause notice to the KESC on the ‘inadvertent error’ nor did seek its comments before alleged corrigendum issued on Nov 23 this year despite required under the law that no order could be modified or reversed unless reasonable opportunity of being heard was issued to the parties affected.

“It is evident that opportunity of being heard was given to the KESC which was condemned unheard” as Nepra acted unilaterally to reverse its order of June 30 – not permissible under applicable laws and regulations.

It said the 2010 order was legally in force until now and should have been opened through a legal process.

Even if the defect in order was discovered subsequently on the written complaint of a party, the same should have been shared with the company for counter comments.

The procedure was also necessary under complaints to Nepra under Section 39 of the Nepra act but KESC was mailed a final corrigendum.

“This is entirely unjustified and unwarranted” under the law and Nepra could not act on its own to review any historical decision without fresh notices being issued to all stakeholders,” the KESC said. The company said that during the disputed period it was given 6 paisa per unit increase on account of gas prices even though it was worked out at 14.37 paisa.

Likewise, it was given tariff on the basis of 25 per cent system losses instead of 27 per cent, resulting in 8.37 paisa per unit loss to the utility.

The combined impact of these two heads at 14.61 paisa per unit was denied to the KESC. Hence, “no corrigendum by Nepra was required in the circumstances since its inadvertent error with regard to tariff differential claim was duly cancelled out by another inadvertent error at KESC’s expense”.

The KESC asked Nepra to withdraw its corrigendum of Nov 23 within seven days and hold hearing into the matter through proper legal process, failing which KESC would be severely prejudiced and exposed to miscarriage of justice. The KESC hinted at raising the issue before a competent court of law.


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