KESC Told To File Breakdown Of Fuel Adjustment Charges


The Sindh High Court directed the Karachi Electric Supply Company (KESC) on Tuesday to file a breakdown of fuel adjustment charges to determine whether such charges should be passed on to the consumers or otherwise. 

The court was hearing identical petitions filed against the privatisation of the KESC and an increase in the electricity tariff. The petitioners, including the Law Foundation and the Sindh High Court Bar Association, submitted that the electricity tariff increase approved for the Karachi Electric Supply Company by the National Electric Power Regulatory Authority was decided on the basis of misrepresentation and without evaluation; therefore, further increases in tariff within the present framework would be illegal. 

 
While dealing with the case on June 25 last year, the court had restrained the KESC from passing fuel adjustment charges on to consumers in its post- March (2010) bills till further decision. The court, however, allowed the privatised power utility to charge fuel adjustment cost to consumers up to March 2010.

In compliance with the court order, Prof Akhtar Nadyme of the NED University filed an expert report on the fuel adjustment charges. He submitted that electricity charges in any tariff were composed of various fully integrated components with fuel adjustment charges being one of them, saying that these charges were neither independent nor mutually exclusive.

He opined that an isolated study of one of the components such as fuel adjustment charges could lead to conclusions that that would not necessarily reflect the true picture and the entire tariff needed to be studied as an identity. According to the expert, fuel adjustment charges no more contribute significantly to power bills as tariff is now being revised almost every quarter and this revision is not restricted to the impact of fuel prices.

He submitted that the formula used for the calculation fuel adjustment charges was based on two parameters, i.e. the fuel price and the heat rate. He said that the fuel price was not in control of either the KESC or Nepra; however, heat-rate represented the efficiency by which fuel was converted into electricity by a given plant.

He mentioned that poor quality of operation and maintenance practices had resulted in higher heat rates. He submitted that Nepra had established heat rates for each plant, saying energy audits of power plants should be periodically conducted to ensure that plants were being operated at the maximum possible efficiencies and the burden of higher fuel consumption due to an inefficient operation and lack of maintenance was not passed on to the consumers as like fuel adjustment charges.

He submitted that energy audits would identify areas of improvement of heat rates and these energy audits should be conducted by independent agencies, saying it was necessary that the power producers should implement and invest in improvement schemes.

The counsel for Nepra and the KESC submitted that on the court’s order the KESC had been restrained from passing fuel adjustment charges on to consumers. However, a statement was also filed by Nepra saying no decrease or increase in fuel adjustment charges was passed on to the consumers from April 2010 to April 2011 and it would not be conducive to maintaining such a state of affair for a very long period. It said that when fuel adjustment charges would be charged it would be a gross burden on the consumers.

A division bench of the SHC, headed by Chief Justice Mushir Alam, directed the KESC to file a breakdown of fuel adjustment charges worked out at actual as has been done by Nepra so as to determine whether such fuel adjustment charges should be passed on to consumers or otherwise.

The court also asked Nepra’s counsel to assist the court to establish that if at all these charges were passed on to the consumers it would be fatal in the smooth functioning of the present mechanism. The hearing was adjourned till June 8, as the petitioners sought time to examine the expert report and submit comments on it.

custom appellate tribunal: The Sindh High Court restrained a member judicial of the custom appellate tribunal from performing duties till further orders.

The court was dealing with the petition of a Member Inspection Team that sought a judicial order against the failure of the law and justice ministry to appoint a judicial officer as a member judicial of the custom appellate tribunal. In its petition, the MIT submitted that instead of issuing a notification of the names sent by the MIT, the ministry of law and justice appointed M Arif Moton on a contractual basis.


Remand Home: The Sindh High Court directed its Member of Inspection Team-I to inspect the facilities at the Remand Home for juvenile offenders, recently built in the Garden area and submit a report within two weeks.


By: Jamal Khurshid
Source: thenews.com.pk

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