ISLAMABAD: The National Electric Power Regulatory Authority (NEPRA) has postponed its decision on the proposed increase in security deposit rates until a comprehensive audit of the deposits collected by power distribution companies (DISCOs) is completed.
During a public hearing, DISCOs faced strong criticism from NEPRA members and industry stakeholders over the proposed hike. NEPRA officials, including Rafique Ahmad Shaikh, Mathar Niaz Rana, Amina Ahmed, and Maqsood Anwar Khan, expressed dissatisfaction with the arguments presented by DISCO representatives, led by Irfan Butt of Gujranwala Electric Power Company (GEPCO).
NEPRA noted that DISCOs had failed to present a compelling case, merely reiterating past arguments. The proposed security deposit increase was seen as an attempt to shift the financial burden of DISCOs’ operational inefficiencies onto consumers.
The regulator instructed K-Electric and Lahore Electric Supply Company to submit similar petitions, ensuring uniform implementation under the standard tariff structure. However, strong opposition from business and industry representatives, including Arif Bilwani, Tanveer Barry, Imran Shahid (Jamaat-e-Islami), and Asim Riaz (All Pakistan Textile Mills Association), rejected the proposal, citing inefficiencies in DISCO operations.
A key concern raised during the hearing was whether the increase would apply to mosques and military installations, a question neither NEPRA nor DISCOs could adequately address. The proposed hike, aimed at covering consumer defaults, would impact all existing users, with the additional charges suggested to be collected in installments.
NEPRA Member (Tariff) Mathar Niaz Rana raised concerns about discrepancies in security deposit collections, as identified in an audit of three DISCOs. Additionally, industry experts warned that higher deposits could push consumers towards solar energy, reducing demand and revenue for DISCOs.
Representatives of the Karachi Chamber of Commerce and Industry opposed the increase, particularly for industries, with Tanveer Barry highlighting that the security deposit jump—from Rs2,010 to Rs54,783—would place an unbearable financial strain on businesses, further incentivizing the shift to solar power.
Barry referenced NEPRA’s State of Industry Report 2024, which revealed a significant gap between the sanctioned load and actual peak demand for both K-Electric and DISCOs, suggesting that consumers were being overcharged for unused energy. Industrial sector representative Aamir Sheikh also criticized the proposal, arguing that businesses facing an additional Rs250-300 million in security deposits would be better off investing in expansion and job creation.
Arif Bilwani accused DISCOs of inflating their sanctioned load to justify higher security deposits. His concerns echoed a broader sentiment that the hike was unjustified, particularly given the discrepancies between DISCOs’ sanctioned capacity and actual demand.
At the hearing’s conclusion, NEPRA Member (Technical) Rafique Ahmad Shaikh firmly stated that without assurances of improved service—such as ending 10-15 hours of load shedding—NEPRA would not approve the security deposit increase. The final decision remains pending until the regulatory body receives the audit report and resolves critical efficiency and fairness concerns within DISCOs.
