ISLAMABAD, Jan 23: The National Electric Power Regulatory Authority (Nepra) imposed on Friday a fine of Rs10 million on K-Electric for illegally charging meter rent and asked it to ensure uninterrupted power supply in Karachi even if its agreement for 650MW import from the national grid was not extended beyond Jan 25.

In a written letter, Nepra reminded the K-Electric that its own net capacity stood at about 2,400MW (2,092MW produced by the utility and the remaining by the private sector, including Gul Ahmad and Tapal), while its average supply to consumers during the fiscal year 2013-14 stood at about 1,700MW. This means the company has sufficient capacity even after accounting for annual maintenance and other shutdowns.

Also read: KE making huge profits at consumers’ expense, Nepra hearing told

Nepra said the K-Electric should have its own arrangements to meet electricity demand in Karachi even if its five-year contract with the National Transmission and Dispatch Company (NTDC) for 650MW was not renewed.

A senior government official told Dawn that the PML-N government had no intention to renew the contract despite demands by the Sindh chief minister and the Muttahida Qaumi Movement given the fact that the previous government had given a substantial space to the entity to develop its own capacity.

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He said that in the worst case scenario the government could implement a decision of the Council of Common Interests of the PPP period to provide 300MW for a year or two.

At the conclusion of a process of notices, show-causes, hearings and responses from the K-Electric started in June 2013, Nepra noted that no approval was granted to the utility through its multi-year tariff or any other applicable document for making its consumers pay the meter rent.

“Therefore, charging of meter rent by K-Electric is totally unjustified and unlawful and by doing so the utility has violated the provisions of its granted licence, its already determined multi-year tariff and rule 6 of the Nepra licensing and distribution rules 1999. Considering the nature of violations and failure of K-Electric to act as a responsible utility, the authority has decided to impose an amount of Rs10 million as fine upon K-Electric,” the regulator said.

The K-Electric was directed to work out the amount collected as meter rent, refund to the consumers through adjustment in future bills and submit a compliance report within 30 days.

Utility terms decision unfair, discriminatory

K-Electric’s chief spokesman Usama Qureshi said the Nepra letter about electricity arrangements beyond Jan 25 and withdrawal of 650MW by the NTDC was a contempt of court.

He said the utility had responded to the letter and asked Nepra to withdraw it.

About the fine for charging meter rent, Mr Qureshi said Nepra had taken an unfair and discriminatory decision. He said Nepra had not heard the utility’s viewpoint and similar notices had not been issued to other distribution companies.

When told that Nepra had written in its judgment that the utility had submitted its responses and was given personal hearing, Mr Qureshi said it was true but insisted that there was no point in such an exercise if the utility’s position was not considered. “We consider it a unilateral decision if our viewpoint is not given weightage,” he said, adding that the K-Electric would appeal against the decision.

The spokesman provided to Dawn a letter written to Nepra. It said the issue of availability of 650MW to the people of Karachi and KE’s service territory was a matter of grave importance involving questions of constitutionality, contract and policy. The KE has already written a letter to the government and the Ministry of Water and Power on Dec 24, 2014 for the continuation of 650MW on the basis of extension on the same terms and conditions for another five years.

“We invite your reference to Clause 6.8 of the PPA of Jan 25, 2010, executed between the NTDC and KE... Till date various high-level meetings are being held between the government and KE to finalise the current extension and in these circumstance, your (Nepra) letter appears to be premature and ill-timed,” the KE letter said.

It said the figures motioned in the Nepra letter regarding KE’s available capacity and its de-rated capacity and the same were materially at odds with the reality on the ground and KE’s available energy and capacity.

During winter, it said, the supply of gas was extremely low and KE’s gas generation plants such as KCCPP [220MW] and others were not able to run at optimal capacity and also there were planned outages due to servicing requirements in winter. Last year KANUPP was closed for six months and is unreliable at present being down for the past one week.

The KE letter said: “In any event, since Napra’s hearing on its show-cause notice on Sept 16, 2014, for underutilisation of generation capacity was pending and it’s fixed for Feb 3, 2015, it would be inappropriate to discuss the same at this juncture and in this regard Nepra should also refrain from doing so to avoid appearing one-sided.

“A reduction of 650MW from the NTDC will result in long hours of loadshedding across Karachi and its industrial zones which will have a negative impact on the country’s economy. It will also not be in the interest of all stakeholders supporting the extension. The Sindh governor and chief minister and the FPCCI have written directly to the prime minister requesting his support for the continuation of 650MW supply to Karachi form the national grid.”

Published in Dawn January 24th , 2015

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