ISLAMABAD - Adopting an unprecedented move, National Electric Power Regulatory Authority (Nepra) in one and half decade has finally approved cut in the power tariff of Lahore Electric Supply Company (LESCO) which would provide Rs 10 billion relief to the consumers of power utility.

Available documents with The Nation divulged that the regulatory authority (Nepra) has now approved cut in the power tariff of Lahore Electric Supply Company (LESCO) by 9paisa to Rs1.51/unit for financial year 2013-14, which in result would reduce the burden of its consumers by Rs10 billion.

In its decision regarding tariff of LESCO for the ongoing fiscal, the regulator has maintained the tariff of domestic consumers use 1 to 50 unit/month at Rs4/unit while 9 paisa cut in the tariff of the consumer use 1 to 100unit/month, and Rs1.51/unit reduction for the domestic consumer use 101 to 300unit/month. Similarly, besides maintaining the tariff of consumers using above 700unit/month, the regulator has approved Rs1/unit decrease in the tariff for those power consumers that use 301 to 700unit/month. Again, the regulator has approved 50paisa cut in the tariff of commercial, industrial agri and bulk supply power consumers.

Documents further disclosed that the LESCO during current FY 2013-14 would sale 14billion, 83crore and 60Lakh power units to its consumers and as a result the power utility would earn heavy revenue worth Rs200 billion and 14crore during said period. However, Rs10 billion cut has been approved with effect to the decision of the regulator for LESCO’s tariff.

Official sources at NEPRA when contacted told that decision regarding the tariff of remaining nine power-distributing companies (Discos) would be issued very soon. They also told that Ministry of Water & Power would issue official notification for power consumers at the lowest rate of tariff, which, however would be set after the issuance of regulator’s decision pertain to the tariff for all Discos including Karachi Electric Supply Company (KESC).  Raising serious concerns about the rights of power consumers during a power load shedding and tariff case, the Supreme Court (SC) had already advised the Nepra to ensure the protection rights at any cost. The regulator has now approved Rs10 billion cut in the tariff of LESCO, keeping in mind the rate of losses and efficiency of power utility because of the concerns raised by the apex court in its decision.  Interestingly, sources at power ministry well aware of the matter informed that finance ministry is annoyed with regulator’s decision pertain to Rs10 billion cut in the tariff of LESCO. However, power consumers would be deprived from approved relief in case the finance ministry decreases the rate of subsidy currently being given to the power consumers. It is worth mentioning here that the regulator has passed certain directions for LESCO in the determination of tariff for FY 2013-14.  The regulator has directed the power utility to complete installations of TOU metering and the study of T&D losses pertaining to 11 KV and below. Similarly, the regulator has directed to create a working group on the issue of over billing with Warid Telecom and come up with timelines, which would result in improving the existing system.

Besides submission of Auditor’s Report with respect to excessive billing, the regulatory authority has also directed to complete the creation of Independent Post retirement benefits funds at the earliest.

“During the hearing for the FY 2010-11, Ex-CEO of the Petitioner, acknowledged that all the consumers were previously issued excessive bills on the basis of 35 days instead of 30 days and this practice has now been discontinued; thus resulting in higher losses,” the documents said.

Following the acknowledgment of Ex-CEO of the LESCO, the regulatory authority took notice of the Ex-CEO’s statement and decided to conduct the Petitioner’s IT system Audit of End-to-End Billing Process for the FY 2010-11 by the team of NEPRA professionals. The NEPRA team accordingly has conducted the System Audit of Billing Processes of the Petitioner (LESCO).

According to the findings of NEPRA team, billing is done manually and has high risk of manipulation because of inadequacies in controls and accuracy of readings. Similarly, incorrect reporting and monitoring of feeder wise losses besides time lag between actual meter reading dates and scheduled dates of area wise batches resulted in excessive billing. More, actual meter readings are ignored for billing purpose which means monthly billing is done on estimations rather than actual besides inadequate supervisory, controls, inadequate field staff etc.