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Nepra exposes bogus billing by KE, Discos

Consumers also experienced significant issues, causing billing slab shifts, status changes, and invalid snapshots

December 05, 2023

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has disclosed a massive and deliberate trend of deceptive meter reading and billing practices by DISCOS in July-August 2023 bills defrauding millions of consumers to conceal their operational inefficiencies.

After widespread complaints of excessive, inflated, and inaccurate billings against Discos in July and August 2023, the Nepra ordered an inquiry and conducted a hearing on September 13, with the CEOs of companies.

The proceedings revealed discrepancies in meter readings, including invisible or deliberately omitted snaps, and instances of monthly readings exceeding the 30-day billing cycle, leading to unjustified billing and reclassification of consumer categories.

A view of Nepras buildings in Islamabad. — Nepra
A view of Nepra's buildings in Islamabad. — Nepra

The inquiry highlights a notable failure among several Discos to comply with the guidelines laid out in the Consumer Service Manual (CSM), approved tariff terms, and conditions mandated by the Regulatory Authority, resulting in widespread dissatisfaction over inflated electricity bills. It recommended MNERA initiate legal proceedings against all Distribution Companies, including K-Electric, under Nepra Fine Regulations, 2021, for violating the Nepra Act, CSM, and tariff terms and conditions.

Consumers also experienced significant issues, causing billing slab shifts, status changes, and invalid snapshots. Extended billing cycles led to overbilling and faulty meter replacements. A deliberate trend emerged, affecting over four lakh consumers from June to August 2023. Inquiry into detection billing shows varying recovery ratios: HESCO and SEPCO at 5pc and 6pc, IESCO, GEPCO, and FESCO at 94pc, 95pc, and 98pc. The CSM violations hinder recovery. KE also noted similar complexities. This flawed system leads to declining recovery ratios, increased losses, load shedding, and deteriorating switchgear. Despite paper improvements, the actual system remains compromised, impacting conscientious consumers, the Nepra found.

Discos’ failure to implement CSM’s percentage checking and issuing detection bills in violation of clauses 9.1 and 9.2 has disproportionately affected lower electricity-consuming domestic consumers. This has sparked a trend of payment withholding, adversely impacting Discos’ revenue recovery, worsening Aggregate Technical and Commercial (AT&C) losses, and increasing load shedding. The responsibility for overcharging consumers rests with Discos, implicated in unlawful practices due to non-compliance with governing documents, particularly the CSM. Charging detection bills to hundreds of thousands of consumers is identified as a blatant violation, the Nepra said.

Nepra found that TESCO contended that all domestic consumers (A-1) are subsidized by the Government of Pakistan, asserting the absence of registered domestic consumers in TESCO. Widespread overcharging of domestic consumers in July-August 2023 revealed. Over 5.7 million MEPCO consumers in July and more than 1.2 million GEPCO consumers in August experienced excessive charges for billing cycles exceeding 30 days. FESCO, LESCO, and HESCO also reported significant numbers of affected consumers.

The Nepra inquiry recommended Discos promptly replace defective meters and charge bills based on actual readings, and submit compliance reports within two months. Discos were also instructed to collaborate with Power Information Technology Company (PITC), review bills since June 2023, and correct discrepancies, particularly for protected/lifeline consumers. Obtain necessary data from PITC for pro-rata revisions, correct bills within one billing cycle, and issue revised bills to maintain protected/lifeline status for affected consumers.

Nepra recommended proceedings against DISCO officials for CSM violations and sought compliance reports within 30 days. It also directed Discos to procure Handheld Units (HHU) for transparent meter readings. HESCO, SEPCO, PESCO & TESCO should scrutinize unrecovered detection bills charged from July 2018 to June 2023, validate authenticity, and take corrective actions. MEPCO, QESCO, and LESCO must recover unpaid detection bills from the same period. It also recommended DISCOS ensure the following of CSM provisions for accurate meter readings, percentage checking, issuance of detection bills, and replacement of defective meters.