KARACHI: The Sindh High Court on Thursday suspended two decisions of the National Electric Power Regulatory Authority (Nepra) regarding power subsidy under the extension of incremental consumption package for industrial consumers.

A two-judge bench headed by Justice Syed Hasan Azhar Rizvi also issued notices to the secretary ministry of energy and Nepra as well as the deputy attorney general for next hearing on a petition filed by the K-Electric impugning both decisions of power regulator.

The bench in its order said: “However, learned counsel for the petitioner undertakes to repay the amount to its consumers if decision in this petition as well as in pending appeal before the NEPRA Appellant Tribunal will be decided against the petitioner”.

After hearing preliminary arguments from KE’s lawyers, the court said that points raised by them required consideration, and suspended both impugned decisions till June 1 through an interim order.

The counsel for the power utility argued that they had filed review applications against the impugned decisions dated Jan 11, 2022 and May 11, 2022 before Nepra and the same were dismissed and thereafter the petitioner challenged the decisions by filing an appeal before the appellate tribunal on May 17, but it was not functional as only chairman was appointed and its members were yet to be appointed.

The lawyers contended that both decision of Nepra were totally contrary to and in violation of the Nepra Act, 1997 as the petitioner under the garb of subsidy had been disallowed to recover its fixed, operational and maintenance cost; depreciation and profit margin.

They further asserted that under the first instrumental consumption package determined by Nepra on December 1, 2020, the entire subsidy was paid by federal government, but surprisingly while continuing the same package Nepra had imposed the burden of subsidy on the petitioner.

The counsel contended that the entire basis of the impugned decision was contrary to the scheme of tariff as provided under the Nepra Act because the respondents failed to consider that multi-year tariff (MYT) set sales target for a control period, i.e. seven years, whereas such decisions had confined the benchmark units to specific months and category which meant there would be inconsistency in the units benchmarked in the MYT versus the units benchmarked in the decisions.

The Economic Coordination Committee had approved extension of incremental consumption package for industrial consumers of ex-Wapda distribution companies (Discos) and K-Electric from July 1, 2021 to October 2023 and under the package application of incremental consumption package for BI (Non ToU) consumers at the rate of Rs12.96 per kWh and budget the additional cumulative subsidy of around Rs11.2 billion on account of difference of Rs12.96 and Rs14.61 per kWh.

Published in Dawn, May 20th, 2022