ISLAMABAD: Top power sector watchdog the National Electric Power Regulatory Authority (Nepra) ordered K-Electric to shares benefits of Rs5.412billion from its profits with its consumers and provide them immediate relief.
According to reports, the Nepra’s decision comes as part of a mechanism included in K-Electric’s approved tariff in 2009, under which the power distribution company is bound to pass on a portion of relief to consumers after earning a specified level of profit.
If the Nepra decision is implemented, the consumers will get a 42-paisa per unit relief in electricity bills from January to December 2014.
According to the Nepra decision, the portion of profit will have be passed on to consumers in three installments during the months of November, December, and January.
Meanwhile, a spokesman for the K-Electric said that the company had obtained a stay order from the Sindh High Court against Nepra’s decision, arguing that it would have adverse financial impact on the company if it was not allowed to keep or use the Rs5.412bn.
Nepra has declared that the power distribution firm is not authorised to keep or use the amount of profit.
According to the decision, Nepra assessed that the K-Electric’s financial results for the year 2011-12 and 2012-13 activated the applicability of the previously agreed claw-back mechanism.
In 2011-12, the company reported an operating profit of Rs 10,270.976mn and Rs 17,864.770mn for financial year 2012-13, enabling an amount of Rs889.917 million for 2011-12 and Rs 4,522.996mn for 2012-13 to be due for claw-back.
However, the Nepra noted that the company was reporting losses since the determination and the mechanism never became applicable in the past.