NEPRA report exposes overbilling scandal

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) revealed on Monday that power distribution companies (Discos) engaged in a “controversial power theft drive,” defrauding millions of consumers of billions of rupees through excessive billing and malpractices.

In an inquiry report, Nepra expressed regret that distribution companies intentionally employed such malpractices to conceal their inefficiencies, resulting in higher electricity bills for thousands of consumers. The companies issued bills with invalid snapshots and manipulated billing cycles of over 30 days to deprive protected consumers of subsidies.

The inquiry report disclosed that domestic consumers were excessively charged during July and August 2023. Over 5.7 million consumers in Multan Electric Power Company (Mepco) were billed for more than a 30-day cycle in July 2023, followed by around 1.2 million in Gujranwala Electric Power Company (Gepco) in August 2023.

Similarly, Faisalabad Electric Supply Company (Fesco) billed over 800,000 consumers in August 2023, Lahore Electric Supply Company (Lesco) around 700,000 in both months, and Hyderabad Electric Supply Company (Hesco) more than 500,000 users in July 2023.

This led to changes in billing slabs, status alterations from protected to unprotected, and shifts from lifeline to non-lifeline for thousands of consumers.

The report expressed grave concern that, in July and August 2023, thousands of consumers received bills with invalid snapshots. Major contributors to this issue included Mepco, Lesco, Quetta Electric Supply Company (Qesco), and Sukkur Electric Power Company (Sepco).

According to the inquiry, billing periods exceeding 30 days, defective meters, and discrepancies in meter readings were widespread issues. Defective meters were not replaced promptly, leading to overcharging and preventing accurate loss calculations.

The inquiry also highlighted discrepancies in metering and billing processes, including invalid snapshots, mismatches between snapshots and bills, and double charging during defective meter periods.

Nepra observed that detection bills charged by Discos were fake and frivolous, resulting in low recovery ratios in some Discos. The recovery ratio in Hesco and Sepco was 5% and 6%, respectively, while Iesco, Gepco, and Fesco had recovery ratios of 94%, 95%, and 98%, respectively.

The report emphasized that the purpose of charging detection bills was to show improvement in losses at the book level, but it led to a damaged system, increased load shedding hours, and deteriorated switchgear panels.

Findings from the inquiry revealed that most Discos failed to comply with relevant Consumer Service Manual (CSM) clauses and tariff terms, resulting in overbilling, impacting Disco recovery rates, and increasing AT&C losses and load shedding.

In conclusion, Nepra asserted that Discos engaged in excessive billing and detection bills through illegal practices, violating Nepra Act, CSM, tariff terms and conditions, and other applicable documents.

The report recommended legal proceedings against all Discos for violations, immediate replacement of defective meters, revision of inflated bills, and actions against officials involved in illegal practices. It also suggested the procurement of Handheld Units (HHU) for transparent meter readings and scrutiny of unrecovered detection bills for authenticity and recovery. Discos were advised to strictly follow CSM provisions in meter readings, percentage checking, issuance of detection bills, and replacement of defective meters.