National Electric Power Regulatory Authority on Tuesday said that the Sindh High Court recent decision of upholding a decrease of 42 paisa per unit per month applicable from January to December 2014, would provide a relief of Rs.5.5 billion to the consumers of Karachi. (K-electric)

According to a handout, after Nepra's continuous efforts and strong defense, Sindh High Court, on Friday, declared that the stance and application of claw back mechanism by Nepra are correct and in accordance with applicable law and accounting principles.

The court dismissed application of KE for suspension of the decision of Nepra. The court also recalled and vacated its earlier interim orders through which federal government was restrained from notifying the claw back decision and schedule of tariff. The amount was to be adjusted as decrease of .42 paisa per unit per month applicable from January to December 2014.

The claw back mechanism envisages a return to the consumers of the profits by K-Electric. The profits to be shared with consumers by K. Electric constituted Rs 889 million in 2011-12 and Rs.4.522 billion in 2012-13 which were over and above 12pc of the overall profit. It was a common ground that K-Electric made substantial profits in 2012-13. Nepra contended that these profits activated the claw aback mechanism. This decision was made in October 2014. Civil suit was filed by K-Electric against the decision of the Authority. KE took the ground that no opportunity of hearing was provided to it, calculations are incorrect and profits are below the threshold of 12pc provided in the mechanism. KE prayed to declare the decision of Clawback as illegal and unlawful. Nepra strongly defended the case on all issues and finally the court provided relief to the consumers, which was long denied by KE.

In order to open up the power sector and provide efficient and affordable service to the consumer Nepra intends to introduce separate tariff for housing societies/ high rise buildings and industrial estates engaged in the sale of electricity.

According to spokeswoman Ayesha Tassaduq, allowing power generation to housing colonies and industrial estates, after fulfilling certain criteria would be a breakthrough decision and would pave the way for reducing burden on the national grid.

She said that the authority has already started consultation process with stakeholders and based on the inputs/ comments and detailed analysis Nepra has finalised its findings which has been uploaded on the website for further suggestions and comments.