LHC orders recovery of fuel adjustment charges from industrial units

The Lahore High Court Monday allowed National Electric Power Regulatory Authority (NEPRA), Water and Power Development Authority (WAPDA) and others to recover fuel adjustment charges from industrial units as per notification.
However, the court exempted domestic consumers using up to 350 units of electricity from fuel adjustment charges.
Furthermore, the court ruled that the domestic consumers using over 350 units would have to pay fuel adjustment charges.
The court ordered respondents to refund money if it was received from domestic consumers using up to 350 units.
The court also remitted the matter to NEPRA for consideration.
Justice Muhammad Khalid Mehmood Khan passed the orders while allowing hundreds of identical petitions filed in 2011 against the recovery of fuel adjustment charges.
The petitions were filed by Gulshan Spinning Mills, Rupali Polyester, various domestic consumers and others against WAPDA, NEPRA and others. The petitioners’ through their counsels said that electricity was one of the biggest single component which alone constituted 50 percent of their total cost of end product.
Minor fluctuation in the electricity price affected the cost of production, they added.
Furthermore, the petitioners said that they had paid electricity bills for the month of April, May, June but the respondents had added 20 percent amount as fuel adjustment charges for months of April, May to the bill of October. They said that the electricity companies took the action on basis of two notifications issued by the federal government on August 23, 2011 under added provisions 31(4) of the Regulation, Generation, transmission, Distribution of Electric Power Act of 1997.
They submitted that the said provision had been added as it was not provided in the original Act. They contended that as per law no notification having an adverse financial impact could be issued.
The petitioners contended that the bills for the months of April, May had been paid, adding that it was a closed transaction and respondents were not authorised to receive fuel adjustment charges for said months.
They asked the court to set aside fuel adjustment charges and notification issued in this regard besides restraining respondents from taking any adverse action against them.
However, the respondents argued that the notification issued for the recovery of charges was legal and pleaded the court to dismiss the petitions.
The court, after having reserved judgement, announced the verdict in open court. The court had already stayed the recovery of fuel adjustment charges from domestic consumers who use electricity up to 350 units.