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Appellate forum to review Nepra decisions

June 27, 2002

ISLAMABAD, June 26: The government has decided in principle to set up a three-member appellate forum of experts to review decisions of the National Electric Power Regulatory Authority (Nepra).

Official sources told Dawn that this would be done through making amendments to the Nepra Act of 1997. A high-level committee led by secretary cabinet division is currently working on a number of amendments to the said act, mostly demanded by the Wapda.

The committee was constituted by the president early this year to listen to the grievances of Wapda and propose amendments, if need be. The proposed amendments are expected to be submitted to the cabinet for consideration early next month.

The deadline given by the president to complete the job has already expired last month but the committee had to interact very closely with the World Bank and the Nepra, Wapda and ministries of law, power and finance.

Sources in the Nepra said that Wapda wanted to have supra- regulatory body that could alter the Nepra decisions, but that is not going to happen. It would be a committee that would consider the decisions of the regulator and could refer back to it (Nepra) for reconsideration like it was being done at present by the ministry of water and power.

The Wapda had proposed that appellate forum should comprise experts of finance, power and management so that it could review in detail the decisions, particularly those relating to tariff matters, and revise if so required.

The Wapda chairman has been very vocal against a number of Nepra decisions and repeatedly asked the president to revise the Nepra composition with the induction of power sector technical experts instead of provincial representation. The Wapda believed that in 14 cases Nepra remained stuck to its first judgment or tariff determination and returned review petitions of Wapda unchanged and without any action. This correspondent contacted two members of Nepra for comments but they did not respond.

Another important subject in the proposed amendments would deal specifically with tariff setting and regulatory aspects of Karachi Electric Supply Corporation (KESC) with clear-cut targets and rates of return keeping in mind line losses and other ground realities so that the new buyers had a fair idea of their investments and returns.

The World Bank has already got an assurance from the government that Nepra would provide to the Wapda a formula for automatic fuel adjustment in the power tariff so that the utility could pass on the impact of international oil prices to the consumers directly and then refer the same to Nepra for review.

Currently, Nepra is determining the fuel-based tariff adjustment after every quarter and most of the times Wapda remains dissatisfied with these determinations.

The government has also given an assurance to the World Bank that it would ensure 58 paisa per unit increase to Wapda to meet its financial targets although Nepra has concluded public hearing on Wapda’s tariff petition last week and is yet to announce its determination.