ISLAMABAD – The National Electric Power Regulatory Authority (Nepra) Tuesday grilled the power distribution companies (Discos) over their request for up to 3260 percent increase in the electricity security deposit of consumers and announced conducting an audit of the existing security fee deposited with the power companies.
In a Nepra’s hearing on the Discos’ petition, the stakeholders strongly opposed the abnormal hike in the security deposit, arguing that on the face of 3 percent default risk, why the distribution companies are burdening approximately 35 million consumers. In separate petitions filed by eight Disos, the distribution companies argued that current rates fail to adequately protect them against financial risks in light of rising electricity costs. The Discos, which have approached Nepra, include Peshawar Electric Supply Company (PESCO), Multan Electric Power Company (MEPCO), Gujranwala Electric Power Company (GEPCO), Lahore Electric Supply Company (LESCO), Faisalabad Electric Supply Company (FESCO), Hyderabad Electric Supply Company (HESCO), Quetta Electric Supply Company (QESCO), and Tribal Areas Electric Supply Company (TESCO).The Discos have requested a revision to align security deposits with current economic realities.
The security deposit sought by the Discos varied from company to company based on a hike from 65 percent to 3260 percent. In its presentation during the public hearing, the Power Division said that since 2010, electricity tariffs have increased by 400%, to which NEPRA member Rafiq Sheikh said that this is a request from the Power Division, but no one from the Power Division has come to the hearing. The regulator expressed its anger on the Discos saying that today’s presentation by the Discos was very poor. Member Nepra Rafique Shaikh said that the power companies have failed to present their case for raising the security deposit effectively. Rafique Shaikh said that electricity companies are asking for guarantees from consumers, so what guarantee is being given to consumers? Consumers are not given electricity for 15 to 20 hours. In Karachi there was no electricity on one feeder for three days, K Electric kept one feeder closed for three days because the bills were not paid, he said. “What does the electricity consumer can do against the Discos for not ensuring supply of electricity,?” he asked. One of the interveners rightly called increase in security a double dip for the consumers, as the consumer bears the burden if the tariff goes up. They bear the burden if the losses of the power companies increase beyond the prescribed limit and they are paying for the bad performance of the DISCOs and now increase in security deposit is another burden, member Nepra said. NEPRA member Maqsood Anwar raised the question that if one consumer defaults, why should everyone be punished? How are the companies estimating how many consumers will default, he asked?
Nepra member Mathar Rana asked how the security was estimated based on the value of the land?. The clueless and ill prepared official of the Discos said that levying security deposit on the value of the land was not their idea, rather “We were asked by the owner (Power Division), so we submitted the application.” Rafiq Sheikh expressed his anger and said, “What kind of response was this? Then we will call the owner and will conduct hearing then,” he said. The power companies argued that the security deposit rates will be applicable to all consumers. Nepra member Mathar Rana remarked that people are already switching to solar, so whatever little work is going on will also be eliminated. However, the Discos representative said that this will not make any difference in electricity consumption. Member NEPRA Rafiq Sheikh said that there is no loss to the companies, but the consumers will be harmed. The representative of DISCOs said that there is a proposal to collect the security deposit from the existing consumers in 12 installments. Rafiq Sheikh objected that if there is money in the accounts, then why is a debt servicing surcharge imposed? If the electricity companies have such a large amount, then it should be audited. NEPRA professionals will audit the security deposit. The regulator also questioned about the existing security deposit with the Discos, and the representative of the Discos argued that the security deposits collected from electricity consumers are safe. NEPRA has reserved the decision on the application, saying that first they will conduct audit of the existing security deposit and after that they will issue the judgment.
