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SHC orders Nepra to Determine FAC for KESC tariff

Sindh High Court Friday ordered National Electric Power Regulatory Authority to determine Fuel Adjustment Charges (FAC) for Karachi Electric Supply Company from April till June 2010, but not pass on the same to consumers till August 10, 2010.

A division bench, comprising Chief Justice Sarmad Jalal Osmany & Justice Tufail H Ebrahim, was hearing three identical petitions filed by The Law Foundation, Sindh High Court Bar Association & Human Rights Commission for South Asia challenging privatisation of KESC & hike in electricity tariff.

They submitted that increase in KESC power tariff as approved by Nepra was made on the basis of misrepresentation, without evaluation. Any type of tariff increase within present framework was illegal. They submitted average generation of KESC from its own resources was about 600MW and equal amount of electricity was purchased from other sources during June 2009 to January 2010.

But, KESC was charging FAC on the entire power supply for distribution in the city. Imposition of FAC on entire consumption was contrary to law, unreasonable and unconstitutional. They contended that the government provided subsidy to power utility and Rs 36 billion were accumulated under this head, but its benefit was not given to consumers. They prayed the court to declare privatisation of KESC and hike in power tariff by the power utility without lawful authority illegal, unlawful.

On Friday, Advocates Anwar Kamal & Kashif Hanif for Nepra with Nepra Director (Operations) Sajjad Muhammad Qureshi, Advocate Saman Imtiaz for Ogra, Kumail Shirani, Abdul Rauf for KESC, DAG Ashiq Raza and Assistant AG Saifullah appeared.

The SHC division bench after hearing partly arguments of Advocates Anwar Kamal and Javed Siddiqui adjourned the matter till August 10, 2010. The court order said: "In the meanwhile, by consent it is ordered that KESC may charge Fuel Adjustment Charges to consumers, which have already been determined by Nepra vide notification SRO 387(1)/2010 dated June 4, 2010 ie up to the month of March 2010. However, thereafter although Nepra may determine FAC for April, May and June 2010 etc, these shall not be passed on to consumers till final orders passed in this petition."

The court requested the Vice Chancellor of NED University of Engineering Karachi to nominate a suitable gentleman, who is well versed and qualified in power generation both hydel and fuel/gas based, to assist this court in order to come up to a just and proper conclusion vis-à-vis FAC authorised by Nepra for KESC. In this regard, the VC may correspond to Nazir of this court.