Karachi consumers accuse Nepra of being ‘rubber stamp’

ISLAMABAD: Karachi-based industrialists, politicians and power consumers on Tuesday criticised the National Electric Power Regulatory Authority (Nepra), calling it a “rubber stamp” for the government and K-Electric.

They accused Nepra of approving every demand of the government and K-Electric without safeguarding public interests.

The criticism came during a public hearing on K-Electric’s petition for a Rs5.45/unit increase in monthly fuel charges adjustment (FCA) for May-June 2024, which would impose a burden of over Rs10 billion on Karachiites. Nepra reserved its decision pending a thorough review of the data.

The consumers also lambasted K-Electric for generating costly electricity and accused Nepra of being ineffective in enforcing its decisions, including a Rs50 million penalty on K-Electric in April 2024 for technical load-shedding. They said the company is still implementing technical-based loadshedding in the city without heeding the authority’s directions.

Karachi residents face additional financial strain due to soaring fuel prices and inflation exacerbated by Independent Power Producers (IPPs). Industries have shuttered and unemployment has surged due to high power tariffs, intensifying calls for action.

Some argue that K-Electric’s license should be revoked and transferred to the National Transmission and Dispatch Company (NTDC) for more reliable and affordable electricity.

Nepra Chairman Waseem Mukhtar presided over the proceedings, with authority members Engineer Maqsood Anwar Khan, Rafique Ahmad Shaikh, Mathar Niaz Rana and Amina Ahmed in attendance. Replying to a question after the hearing, Mukhtar stated that K-Electric’s power generation cost was around Rs27/unit, compared to the government’s Rs9/unit.

Imran Shahid of Jamaat-e-Islami’s Karachi Chapter criticised Nepra for favouring K-Electric, suggesting the authority should be renamed “advisory” if it cannot enforce decisions and prevent misconduct. Recent rainstorms further exposed K-Electric’s inadequacies, with over half of the power feeders tripping.

Shahid raised concerns about dollar-based returns granted to K-Electric and warned of strong protests if these returns were sanctioned. He also accused K-Electric employees of widespread power theft and highlighted an outstanding Rs54 billion owed to consumers by the company.

The Nepra chairman responded that all decisions are publicly accessible on the authority’s website and any party can file a review petition for legal remedies. The Korangi Association representative expressed concerns over the recent price hikes, citing severe heat and extended load-shedding in May and June. He warned that allowing the Rs5.45/unit FCA collection in August bills could trigger public unrest, especially among industries, and proposed staggering the collection over winter months instead. Arif Bilwani, a leading businessman from Karachi, suggested that the government, having a surplus supply, could benefit consumers by closing all K-Electric plants and allowing electricity supply from the Central Power Purchasing Agency (CPPA). A K-Electric official stated that the company has an agreement with the government for a limited power supply.

Bilwani noted that while there are constraints in supplying electricity from South to North, this move would also reduce the capacity payment burden on consumers. “Why is Nepra not putting this suggestion before the Power Division?” he asked. Bilwani criticised Nepra, stating that if it cannot protect consumers’ interests, the authority is of no use. It accepts every demand of the government and K-Electric without safeguarding public interests, indicating that there was something fishy. Mukhtar refuted the claims that Nepra was a rubber stamp, asserting that the authority makes prudent and transparent decisions with public interest in mind. He also noted that the government requested an increase in the base tariff to Rs8.28 per unit for FY25, but this was contained to Rs5.72 per unit, resulting in a Rs260 billion relief in tariffs.