ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has slapped a fine of Rs10 million on K-Electric for power crisis in Karachi in June last year that led to death of hundreds of people due to suffocation.

In an order issued on Friday, Nepra said the fine was imposed on the private utility on two counts — Rs5m each — for its failure to provide uninterrupted electric power services to consumers and deliberately underutilising its generation capacity, said a Nepra announcement.

When contacted, KE spokesman Fakhar Ahmad said, “The matter is already sub judice with honourable Sindh High Court and the KE was in the process of reviewing the Nepra decision and would not comment more on the issue.” He added: “KE is a law abiding corporate entity.”

Nepra warns the utility of strict punitive action if it continues to underutilise its generation capacity

A government official said the private utility would be happy to pay Rs10m penalty and settle an issue that created a lot of controversy in and outside parliament last year.

Nepra said extended hours of load-shedding, system failures and power supply breakdowns were noted in the service territory of K-Electric, resulting in serious complaints by its consumers in June last year.

It said a fact-finding committee was constituted to collect necessary information and submit a report of its findings. After considering the recommendations and information submitted by the committee, the authority issued a show-cause notice to KE.

KE was given reasonable opportunity to respond and after hearing and considering the response and the comprehensive investment plan submitted by KE, Nepra took three decisions on Friday.

First, in respect of failure to provide uninterrupted electric power services and restore the power of affected consumers within reasonable time, the authority imposed a fine of Rs5m to be paid by KE within 30 days.

Second, another Rs5m fine was imposed on the utility for underutilisation of its available generation capacity. This is also payable within 30 days. If KE continued with the practice of reducing or underutilising its generation capacity, strict punitive action will be taken against it in the future, the regulator said.

Third, in respect of failure to provide electric power services to all consumers on non-discriminatory basis, the regulator directed KE to provide electric power services to all consumers without any discrimination who met the consumer eligibility criteria and were neither defaulters nor involved in theft of electricity.

Regarding overloading, tripping and other distribution and transmission failures, the regulator said it took serious notice of KE’s failure to properly maintain and upgrade its distribution and transmission system.

However, considering the commitment of KE to improve its system and investment plan of around $400m, the regulator said it decided to provide an opportunity to KE to increase its generation capacity and improve its transmission and distribution system strictly in accordance with the investment plans.

The regulator also directed KE to complete all indicated investment plans within the timelines and file quarterly reports. It further decided that in case of failure of KE to follow instructions and directions of the regulator and non-implementation of committed investment plans, it would be constrained to take further punitive actions under Section 28 of Nepra Act.

Published in Dawn, March 26th, 2016