Saturday September 18, 2021

Families overbilled with impunity: Power companies make a mockery of NEPRA rules

The billing period rule ensures that customers are not denied a subsidy as long as they do not cross the 300-unit threshold within a 31-day period
September 08, 2021

KARACHI: Have you been shocked by the unduly large electricity bills you have been receiving recently? You are not alone. Families across the country have been forced to pay unfairly high electricity bills in the past few months as billing malpractices by Pakistani power companies have gone unchecked by the apex regulator, a new Geo News investigation has revealed.

Meanwhile, despite being alerted to the issue, the National Electric Power Regulatory Authority (NEPRA), which, among other things, is tasked with protecting citizens from unlawful billing, seems to be taking a lax approach, saying it will only address individual cases of overbilling when they are filed through its consumer complaint channel.

According to the bills reviewed by Geo TV, Karachi’s K-Electric (KE), Faisalabad Electric Supply Company (FESCO), Hyderabad Electric Supply Company (HESCO), Multan Electric Power Company (MEPCO), Gujranwala Electric Power Company (GEPCO) and the Sukkur Electric Power Company (SEPCO) have billed their customers for more than the allowed 31 days in one month on more than one occasion since January 2021.

Some of these companies went as far as to issue bills for 35 and 37 days of electricity usage to their customers in a single month, our investigation found.This is a gross violation of a key condition set by the NEPRA in its agreement with each of these power distribution companies, which states that all tariffs for the residential customers are applicable only on a maximum billing period of 31 days. The NEPRA has confirmed through a written statement that there is no relaxation or exception to this rule.

The rule is a critical component in the government’s calculation of how much electricity subsidy each residential customer is entitled to each month. It is also crucial in determining the new 7.5pc income tax penalty that has been imposed since July on electricity bills exceeding Rs25,000.

Yet, either due to gross negligence or disregard for the law, the power companies have tampered with the tariff terms by billing customers for as many as 37 days, forcing customers to pay higher electricity charges and taxes than they were legally liable to pay.

Families overbilled with impunity: Power companies make a mockery of NEPRA rules

MEPCO has most blatantly abused the rule. In May, it charged customers for as many as 37 days of electricity use on the pretext of the Eid-ul-Fitr holidays. Even the customers whose meter reading dates did not fall during the Eid holidays were subjected to the same billing period.

The second major violator, SEPCO, billed customers for 35 days in May (on account of Eidul Fitr) and then again for 34 days in July (on account of Eid-ul-Azha).

Meanwhile, since January, both GEPCO and FESCO have sent customers 33-day bills on more than one occasion. Likewise, HESCO has sent customers 32-day bills on more than once. FESCO also charged customers for 34 days in the month of May on the pretext of Eidul Fitr holidays.

KE, which supplies electricity to Karachi and its surrounding areas, was found to have issued 32-day bills on more than one occasion in the period reviewed. Likewise, LESCO sent out 33-day bills to at least some customers in the month of August.

Based on the limited data available, IESCO was the only utility which remained largely compliant with NEPRA’s stipulations and maintained billing cycles where customers were not charged for more than 31 days in any month in the period reviewed.

Power sector officials argue that any extra days charged are always adjusted in the previous or next months’ billing cycles, but the calculations show that these adjustments do not always offset the impact if the customers are pushed into a higher tariff slab when extra days are added to their billing period. All households receive a subsidy on each unit of electricity they consume up to 300 units, which is paid by the government. This per unit subsidy turns negative when more units are consumed over that threshold, meaning that the customers have to pay much higher charges on each additional unit of electricity used.

The billing period rule ensures that customers are not denied a subsidy as long as they do not cross the 300-unit threshold within a 31-day period. However, if longer billing periods are implemented by the companies, the additional units get added on top of customers’ 31-day usage tally, which can push them into higher slabs with a negative subsidy.

Power sector officials, when questioned about the legality of charging customers for more than 31 days of electricity usage, claimed there is nothing wrong with the practice because the companies sometimes have to delay meter reading due to various operational reasons, as well as weekly and public holidays. They claimed there is an unwritten ‘understanding’ with NEPRA that allows them to do so.

Families overbilled with impunity: Power companies make a mockery of NEPRA rules

In fact, the NEPRA has communicated to Geo News that there is no such ‘arrangement’ in place. Likewise, lawyers say that the companies’ arguments hold little legal value. “In the absence of any exception/ relaxation given by NEPRA, [a power company] cannot unilaterally say that it can interpret the billing period to mean something other than what NEPRA has defined it as,” Maria Farooq, partner at Axis Law and an expert on power sector dispute resolution, said when posed with the question. “That is akin to changing the terms of the tariff, and no company has any authority to do such a thing. The tariff can only be changed by NEPRA, and it only does so through a legal process after which it notifies it to the public,” she said.

NEPRA agrees with this view. “In case any DISCO has billed any consumer, over and above [the maximum 31 days allowed], specific cases if any, may be referred to the authority as consumer complaint, so that the authority can take action against the said utility,” it said in its written statement to Geo News.

A NEPRA official, who spoke to this correspondent, said any customer whose bill was pushed into a higher tariff slab due to billing of more than 31 days should contact the regulator with evidence. “All cases supported with evidence will be addressed and any overbilling will be rectified,” they promised.

However, apart from reassuring that individual cases of overbilling will be rectified, the regulator gave no indication of how it plans to protect and restore the amounts overbilled from customers who may not know how to file a formal complaint.

The selective approach runs the risk of allowing power companies to get off scot-free and avoid any expensive audit that would seek to reimburse all the overbilled customers instead of a select few.