ISLAMABAD: Pending an inquiry sought by the government, the National Electric Power Regulatory Authority (Nepra) has overturned its decision taken more than two years ago that held the K-Electric Ltd’s (KEL) top hierarchy involved in overbilling its consumers and issuing unjustified and inflated bills to maximise revenue.

“The authority (Nepra) modifies the impugned decision dated June 10, 2014 to the extent that KEL must ensure that no such kind of incident takes place in the future, said an order signed by all the four members including chairman of the regulator. “Having said that, further proceedings on the show-cause initiated under Nepra (Fines) Rules, 2002 on this cause of action have been closed.”

The regulator said it appeared that neither any excessive billing was carried out nor any detection bill was issued in pursuance of the impugned emails and the complainants could not provide any cogent proof to establish their claim, except for emails from ex-deputy general manager Shoaib Siddiqui asking field offices to carry out excessive billing and issue detection bills to consumers.

Just last week the Ministry of Water and Power asked the regulator to probe Rs62 billion overbilling to Karachi-based consumers over the past few years and hold accountable all those involved. The regulator constituted a three-member inquiry commission on Friday and has yet to come out with its findings. But it released its judgment related to a past case.

In its June 2014 decision, the then three-member Nepra committee unanimously revealed that the management of K-Electric, including a former managing director and all its regional heads, had been involved in overbilling its consumers and issuing unjustified and inflated bills to maximise revenue. The regulator at the time directed K-Electric to take action against the officers involved in excessive billing, including its former chief executive and report compliance within three weeks.

At the same time, the regulator separately initiated proceedings against K-Electric under Nepra’s fine rule and issued show-cause notice to K-Electric that why it should be imposed a penalty of Rs100 million.

The power company later filed a civil suit in the Sindh High Court, challenging the Nepra notice. The high court barred the regulator from any final order without its permission but allowed it to continue proceedings on the show-cause notice.

K-Electric contended that no act of excessive billing had actually occurred following “self-motivated” emails issued by Shoaib Siddiqui which only related to one out of four regions. It said the June 2014 decision of Nepra also acknowledged that excessive billing and imposing detection bills was not done. It said the company’s senior management had nothing to do with Mr Siddiqui who had claimed to have received verbal instructions from the top for overbilling and detection bills.

The company maintained that the complainants had failed to provide credible evidence of overbilling at the time when questioned by Nepra in public hearings. Based on this, K-Electric said that it was an isolated incident and upon asked to clarify, Mr Siddiqui had resigned from the post and was no more an employee of the company.

Nepra had issued its decision following its investigation spanned 18 months of inquiries and hearings into six separate complaints, including some referred to it by the Supreme Court. Nepra obtained certain emails from K-Electric officials, ordering additional billing of consumers. One of the company’s former general managers, Mr Siddiqui, confessed that he “issued directions to field formations to carry out excessive billing and issue detection bills”.

Mr Siddiqui resigned after the inquiry but was given a job in Byco — a sister organisation of K-Electric. He “was made a scapegoat to protect the KESC management and was accommodated in an Abraaj group concern. Another executive, Arshad Iftikhar, Mr Siddiqui’s supervisor, was issued a warning and later on, promoted,” the inquiry held. The Karachi Electric Supply Company, or KESC, was the former name of K-Electric.

Some of the complainants referred to orders for 10m units of excessive billing in September 2012, but Mr Siddiqui confirmed that 2m units were billed through 11 cycle days. Nepra said the overbilling that was supposed to be carried out did not actually take place because certain emails were leaked to the print media.

It said the orders for extra billing of 11 cycle days, an increase of 50 units for all consumers and the issuance of unjustified detection bills were issued by the former KESC chief executive officer on Sept 18, 2012.

The regulator said that on an inquiry by Nepra, the KESC concealed the facts and reported that the top management was not involved in issuing these directions. The record, however, suggests that it was clear that the power company’s management was involved. “Concealing the facts from Nepra constitutes violation of the provisions of Section 44 of the (Nepra) Act, Rule 20 of Nepra Licensing (Distribution) Rules 1999 and Article 15 of KESC’s distribution licence”.

It said that from the emails it was clear that the KESC has been issuing such directions to field formations on a regular basis. It was also clear that these bills were being issued without observing the code laid down in the consumer service manual.

Published in Dawn February 2nd, 2017