Nepra to issue show-cause notices to Discos for overbilling

The National Electric Power Regulatory Authority (Nepra) has announced its intention to hold distribution companies (Discos) accountable for overbilling consumers during July and August of the previous year.

In a public hearing led by Nepra Chairman Waseem Mukhtar, the regulator voiced concerns over Discos seeking an additional Rs85 billion in recovery from consumers over three months, primarily as capacity charges, while numerous applications for new connections, which would utilize approximately 1,100MW of capacity, remain unaddressed.

Nepra officials were particularly critical of the casual approach and lack of preparation from power company executives, including the CEO of the Central Power Purchasing Agency (CPPA), in responding to queries during the hearing.

The session was called to deliberate on the Discos' request for another Rs85 billion for the second quarter of the fiscal year, which would result in a national rate increase of about Rs4.5 per unit for three months.

The regulator expressed dissatisfaction with the Discos' responses to instances of excessive billing identified in an investigation report.

Formal show-cause notices are expected to be issued within days, with Nepra aiming to resolve the matter within a month. The investigation found that Discos had overcharged consumers by up to 100% in July and August 2023 through extended billing cycles and other means.

Furthermore, Discos have filed tariff petitions seeking to raise around Rs85 billion from consumers over the next three months under quarterly tariff adjustments (QTA) for October to December 2023.

This comes in addition to a pending decision on a monthly fuel cost increase of about Rs6.5 per unit for February.

The proposed adjustments are intended to cover the additional financial impact of capacity charges due to currency devaluation and interest rate hikes, among other costs, for the second quarter of the fiscal year.

Currently, consumers are paying approximately Rs3.28 per unit QTA for the fourth quarter of the last fiscal year, aiming to collect more than Rs200 billion across the country, including for K-Electric.