KE restrained from taking coercive action against exporter who challenged additional surcharge

The Sindh High Court (SHC) has restrained K-Electric (KE) from taking any coercive action against a textile exporter who challenged the imposition of an additional surcharge by the federal government on power consumers to cover the power sector loan.

The high court in the meantime directed the petitioner to deposit the additional surcharge in the name of power holding loan (PHL) levied in electricity bills from March 2023 onwards with the Nazir of the court in shape of a pay order or bank guarantee.

The interim order came on a petition of the textile exporter against imposition of the additional surcharge of Rs3.39 per unit on power consumers by the National Electric Power Regulatory Authority (Nepra) on the application of the federal government to cover up the mark up charges of over Rs800.253 billion outstanding finance facilities till 2022.

A counsel for the petitioner submitted that the imposition of additional surcharge was neither tax nor fees being collected through the electric supply companies from the end consumers and Nepra had no power to impose additional surcharge on the consumers on the direction of the federal government.

He submitted that the levy of additional surcharge on consumers was due to inefficiencies of electric distribution companies that could not be recovered from the end consumers.

He submitted that the entire function of Nepra was defeated when the federal government levied a surcharge and deemed it as a cost without any scrutiny from the regulator or under the tariff-determination process and such an act was tantamount to the regulator’s capture by the government.

He submitted that the imposition of additional surcharge considered to be cost incurred by the distribution companies was in fact compulsory extraction of money which was not permissible under the Constitution.

The high court was requested to declare that additional surcharge in the head of PHL loans from consumers to be in excess of jurisdiction of Nepra and restrain the KE from taking any coercive action against the petitioner in respect of the collection of additional surcharge and allow the petitioner to deposit the said surcharge before the Nazir till disposal of the petition.

A division bench of the SHC headed by Justice Nadeem Akhtar after the preliminary hearing of the petition issued notices to the KE, Nepra and others and called their comments.

In the meantime, the high court restrained the KE from taking any coercive action against the petitioner and allowed the petitioner to deposit the impugned additional surcharge to the Nazir of the court.

It is pertinent to mention that Nepra had allowed the federal government’s motion for imposition of additional surcharge of Rs3.39 per unit to be recovered from the consumers of electric supply companies for the period of March till June 2023 to cover the markup charges of PHL loans for the fiscal year 2022-23.