PESHAWAR - The Network for Consumer Protection on Thursday opposed power tariff hike the Peshawar Electric Supply Company (Pesco) has proposed in a public hearing organized by the National Electric Power Regulatory Authority (Nepra) here.

A three-member Nepra authority heard the tariff petition of Pesco, seeking Rs 5.74 raise in the power tariffs per kilowatt hour (Kwh)- from Rs. 10.72 to Rs. 16.46. The Pesco, represented by its Chief Executive Officer Brig (retd) Tariq Sadozai, submitted that the Nepra determined the tariff of Rs. 13.77 per Kwh for the year 2011-2012 on July 04, 2011. However, the government notified the tariff at Rs. 10.72 per Kwh.

He contended that the tariff determined by Nepra for the 2011-12 was not sufficient to meet the revenue requirements of Pesco, which had forced the latter to file the review petition that was turned down in March 2012. He added that the PHC issued stay order in June 2011 and February 2012 on Charging Fuel Price Adjustment and the Pesco could not pass on the fuel price to its customers.  “Pesco has only charged a nominal amount of Rs 220 million on account of Fuel Price Adjustment for the month of July 2011.”

and consequently suffered a loss of Rs 10 billion to this account during the financial year 2011-12,” the Pesco tariff petition states.

Representative of The Network for Consumer Protection - an independent non-government as well as non-profit organization working for the promotion and protection of consumer rights - Muhammad Aftab Alam argued that the petitioner’s request for increase in consumer-end tariff through the petition is unjustified as the petitioner has proved to be inefficient in meeting the targets set by the Nepra in previous years.

“It has also failed to comply with the directions of the Nepra in reducing its losses from 36 per cent to 28 per cent,” he said, adding that according to the estimates one per cent reduction in losses equals to Rs 1 billion saving for the Pesco.

He said that it is pertinent to mention here that even the level of 28 per cent determined by the Nepra for Pesco is too high.

“The neighbouring distribution company (Disco) i.e. the Islamabad Electric Supply Company (IESCO), has brought down its electricity losses to less than 10 per cent.

Some variations of 5-8 per cent of losses can be justified, but a difference of more than 20 per cent as compared to the neighbouring Disco is totally unjustified,” he submitted before the Nepra authority.

The Network pointed out that the amount of Pesco receivables has been projected to increase from Rs. 41,104 million in 2011-12 to Rs 47,504 million in 2012-13.

 “This huge increase in the receivables shows lack of seriousness of the petitioner to improve its efficiency,” he said.

This is also alarming, he went on to add, because of the fact that the inefficiency of the petitioner in recovering its dues from consumers is curtailing its capacity to pay for the electricity to Central Power Purchase Agency (CPPA).

“This ultimately adds to the ever increasing circular debt which is the main cause of the electricity shortfall as well as the loadshedding,” he said.

He further argued that given the law and order situation in Khyber Pakhtunkhwa, the Ministry of Water and Power has approved 40 per cent Hard Area Allowance for the employees of Pesco.

However, despite having such huge Hard Area Allowance, the Pesco had to bring down its losses and recover its receivable.