Imtiaz Ali Shah
The electricity consumers have received bills for February 2022 and found that Fuel Price Adjustment charges have been levied upon them for previous months. Moreover, National Electric Power Regulatory Authority has issued a notification S.R.O. 413(1)/2022 dated 10.03.2022 regarding adjustment in fuel charges regarding Ex-WAPDA Distribution Companies for January 2022. It is the right of the consumers to know when they have to pay for Fuel Price Adjustment and when they are not? Whether Domestic Consumers who utilize less than 350 units per month are liable to pay the charges for fuel adjustment? This article will address these issues.Fuel Price Adjustment (FPA) or Fuel Charge Adjustment (FCA) are decided by NEPRA to account for the variation in fuel prices and generation mix. According to NEPRA, the actual increase or decrease in fuel cost prices has to be adjusted in consumers’ monthly bills. The coal and fuel prices vary every month based on the demand and supply; thus, the cost of producing electricity changes accordingly. The electricity generation companies pass on this cost to distribution companies, thereby passing it on to consumers Fuel price adjustment is to be calculated every month. The monthly adjustment on account of fuel charges variation is made in pursuance of the provisions of section 31(7) of the NEPRA Act. It is a charge that applies per unit of electricity consumed. Unlike fixed costs, it is a variable component of the electricity bill and changes monthly according to electricity consumption. Under sub-section 4 of section 31 of The Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997, the Authority may, on a monthly basis and not later than a period of seven days, make adjustments in the approved tariff on account of, any variations in the fuel charges and, policy guidelines as the Federal Government may issue and, notify the tariff so adjusted in the official Gazette. In the case of Messrs Farooqui Ice Factory, Gambat (PLD 2014 Sindh 443), Honourable High Court of Sindh has held that ‘Proviso to S.31 (4) of Regulation of Generation, Transmission, and Distribution of Electric Power Act, 1997 provided that review in fuel charges in view of a variation of fuel price and the approval of tariff had to be made on a monthly basis and not later than a period of seven days, which meant that period in all should not exceed a month and seven days—Tariff, thus, was governed by the monthly decision of the National Electric Power Regulatory Authority (NEPRA), which it had to make within the said period’. Consequently, NEPRA or Power distribution companies has no authority to recover the FPA charges of previous months, which amounted to retrospective recovery, and the superior court deprecates such practice.Pakistan is a democratic country. It is a welfare state, and it is her responsibility to protect the fundamental rights of citizens and implement the principle of policy in its true letter and spirit. There are different sorts of electricity consumers, i.e., Domestic, Commercial, Industrial. There are further two types of domestic consumers of electricity, and they can not be treated on equal footing because one is wealthy and they can pay the electricity cost at any rate, and others are poor they even can not pay the subsidized rate. If the poor people are burdened with the cost of FPA, they will be unable to fulfill their necessities. To meet up with such a situation, the Honourable Lahore High Court has held in the case of Pakistan Flour Mills Association (PLD 2013 Lahore 182), that ‘domestic consumers who were consuming 350 Units of electricity or less per month were not liable to pay the fuel adjustment price and the electricity distribution companies were bound to refund the already recovered fuel adjustment charges to such consumers or might adjust the refundable amount in future monthly bills’. It is a settled principle of law that the NEPRA and DISCO are not entitled to recover Fuel adjustment charges from the domestic consumer who utilizes less than 350 Units per month. The consumers who are aggrieved by such acts of power distribution companies have the right to approach Electric Inspector NEPRA or Member Consumer Affairs NEPRA for the panacea of their grievances. Under Section 31 (2) of the Act of 1997, the NEPRA is bound to protect consumers against monopolistic and oligopolistic prices. It is an admitted fact that electricity is the Monopoly product of WAPDA. The NEPRA is thus bound to examine minutely each component required and used for a generation while ascertaining the rates, charges, and terms and conditions for providing electric power services. Under the NEPRA Act 1997, it is the Authority’s duty while determining the tariff to protect the interest of both the parties, the consumers and the Generators.
