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Fuel price adjustment can’t be challenged: Nepra

June 09, 2012

ISLAMABAD, June 9: Responding to over 170 petitions filed against imposition of the fuel price adjustment (FPA) levy on electricity consumers, the National Electric Power Regulatory Authority (Nepra) has told the Islamabad High Court (IHC) that determination of electricity rates was its exclusive function which cannot be challenged. The petitioners, domestic and commercial consumers, claimed that the imposition of FPA was illegal, and requested the court to restrain Nepra from collecting the charge for September, October, November, December 2011 and January 2012.

In its written reply submitted to the IHC, Nepra claimed that the monthly adjustment was being made in exercise of the statutory duties, hence it cannot not be challenged. It said the authority had been collecting the monthly fuel adjustment levy since 2009 without any objection raised by the petitioners.

The reply claimed that the adjustment was imposed after fulfilling all the legal requirements and was not imposed retrospectively since it was charged in accordance with the notified mechanism for the particular month during which the consumption was made by the consumers.

“In so far as the retrospective issuance of the notification, the fact remains that the notification could not be issued well in time due to restraining orders from the court and it was recovered later,” the reply added.

Nepra said companies generated electricity and raised their invoices during the succeeding month in accordance with the power purchase agreement just like the consumers who consume electricity for the whole month and pay their bill in the succeeding month.The adjustments are to be made after receipt of actual date of generation from different sources and then such date is thoroughly reviewed and analysed by Nepra so as to avoid any error.

The increase in tariff is due to hike in the fuel charges which affects the generations mix, which is neither in the control of Nepra nor the distribution companies.

The petitions had, however, said power distribution companies were collecting the FPA with retrospective effect earning a profit of billions of rupees, adding the adjustment levied from the month of August was also against the interest of the consumers.

They alleged that Nepra had collected Rs77 billion under the FPA between June and July, 2011, and that the authority recently imposed FPA at the rate of 87 paisa to Rs2.13 per unit for September 2011 to January 2012.

Nepra had imposed Rs2.04 per unit additional fuel price adjustment charge on all the electricity consumers in July 2011; Rs3.03 for August, Rs1.67 for September, Rs2.13 for October, Rs1.17 for November, 86 paisa for December and Rs1.86 for January 2012, one of the petitioners, Barrister Abu Bakar Sehri said.

He said the consumers were already paying Rs4.35 per unit similar surcharge in their bills.

According to Barrister Sehri, Nepra is a statutory body but was duty-bound to protect the interest of the consumers. The FPA could not be imposed without hearing the consumers at length, and if imposition of the adjustment is indispensable, the authority should adopt the proper procedure, he added.