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Nepra can’t admit tariff revision plea by Wapda

June 13, 2002

LAHORE, June 12: The National Electric Power Regulatory Authority (Nepra) cannot admit a tariff revision petition from Wapda, and it violated its own law by doing so.

The Monitor Consultants, a consultancy firm headed by a former chief operating officer of the Pakistan Electric Power Company (Pepco), stated this in a letter to the Nepra. The firm was asked to comment on Wapda’s tariff revision petition.

Under the act, which created Nepra, only a distribution licensee can apply for tariff revision. But Nepra accepted the petition filed by general manager (finance) power wing, Wapda, whereas Wapda is not a distribution licensee of the Nepra.

A consumer end tariff (CET) petition can only be filed by bona fide licensees, which, in this case, are eight DISCOs (distribution companies), the letter said.

The Nepra, in an apparent oversight, has admitted the petition from Wapda on behalf of its distribution companies, it maintained.

Clearly, Wapda has filed petition for its “Power Wing”, which is neither owner of the Discos nor authorized by the owner — the government of Pakistan — of these distribution companies.

“As the Nepra may be aware of the fact that under directives of the government of Pakistan, the Pepco transferred the shares of the Discos held by Wapda to the president of Pakistan on March 24, 2001,” the letter said.

As such, the petition has neither been submitted according to the law nor accepted under it, the letter claimed.

Though Wapda has named it a request for the rationalisation of electricity tariff, it, in fact, is only a demand for increase of 88 paisas per unit to finance Rs55.5 billion deficit for years of 2001-02 and 2002-03. Further, the petition asks for an across-the-board increase, including the poor life-line category of consumers with consumption below 50 units. This is itself most...irrational and may result in huge public outcry, the letter feared.

Further, the tariff as well as the increase requested is not only irrational but anti-market because it penalises consumer for high consumption. In essence, the basic tariff as well as the increase is based on demand suppression model which was implemented prior to the Nepra Act, when there was a shortage of 2,000 to 3,000MW and it was intended to restrict electricity usage, specially by domestic customers. Now, there is surplus generation capacity of about 1,000 to 2,000MW at peak and of about 2,000 to 3,000MW at off-peak hours. As such, any further increase on all slabs would make tariff “more demand suppressive and irrational,” it claimed.

In view of these anomalies, the Nepra is requested to review the petition under the requirements of “jurisdiction, intent, legal basis and applicability” and return the petition for re-submission by the legal licensees, it concluded.