ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has imposed Rs 25 million fine on Lahore Electric Supply Company (LESCO) due to its failure pertaining to improvement in T&D losses and recovery in FY 2023-24 as compared to FY 2022-23.
According to background information, Nepra received a Circular Debt (CD) Report for June 2024, from CPPA-G through an email on July 30, 2024. The report revealed that DISCO’s electricity purchases for FY 2023-24 were reduced to 115,142 GWh, ie, 1percent as compared to 116,696 GWh for FY 2022-23. Further, DISCO’s losses during FY 2023-24 increased to 18.31percent as compared to 16.84percent during FY 2022-23, i.e. and increase of 1.47percent. Nepra’s allowed average target of T&D losses for the FY 2023-24 was 11.77percent. Thus, DISCOs breached the target by 6.54percent. This breach of target contributed around Rs. 276 billion in Circular Debt for FY 2023-24 despite the fact that DISCOs have been allowed an investment amount of Rs. 163.1 billion for FY 2023-24 to improve their network.
While reviewing the losses of each individual DISCO as given in the CD report, it was noted that LESCO has contributed to an increase in overall and financial losses. T&D losses of the licencee have increased to 15.92percent in FY 2023-24 as compared to 11.88percent in FY 2022-23. Due to this increase, the financial loss has also increased to Rs. 47.6 billion in FY 2023-24 as compared to Rs. 25.8 billion.
During the hearing, the Licensee submitted that their officers were evading various law enforcement agencies due to ongoing inquiries related to wrong/excessive billing. As a result, they were unable to focus on the company’s operational performance, particularly with regard to losses. This further substantiates that Licensee actions concerning metering and billing were improper, leading to their inability to face law enforcement agencies. Had they not been at fault, they would have been able to attend office and concentrate on their responsibilities, which they ultimately failed to do.
The DISCO admitted to carrying out overbilling in violation of the NEPRA Consumer Service Manual (CSM), and the excess amount was returned or adjusted in compliance with the directions of the Nepra Authority. This further constitutes an admission by the Licensee, reinforcing the validity of the allegations outlined in the show cause notice.
Therefore, the Authority decided to initiate legal proceedings against the Licensee under the NEPRA Fine Regulations, 2021.
After due deliberations and taking into account the facts, submissions/arguments made by the Licensee, and in light of the NEPRA Act, NEPRA (Fine) Regulations, 2021 and other applicable documents, the Authority was of the considered opinion that the Licensee has failed to provide any satisfactory reply to the Show-Cause Notice served to it. Therefore, the Authority decided to impose a fine amounting Rs 25 million on the DICO due to its failure pertaining to improvement in T&D losses and recovery in FY 2023-24 as compared to FY 2022-23.
Copyright Business Recorder, 2025
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