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The NEPRA Tribunal Decision regarding Fresh Tariff Determinations upheld by Islamabad High Court, Islamabad

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The NEPRA Tribunal Decision regarding Fresh Tariff Determinations upheld by Islamabad High Court, Islamabad

Islamabad 18-07-2024: The Islamabad High Court has dismissed a series of appeals challenging the validity of tariff adjustments made by the National Electric Power Regulatory Authority (NEPRA). The appeals were brought forward by various industrial entities disputing NEPRA’s Fuel Price Adjustment (FPA) and Quarterly Tariff Adjustment (QTA) determinations from 2021 to 2023.

The appellants, comprising numerous industrial end-users of electricity, had contested NEPRA's determinations on the grounds that the regulatory body was not properly constituted following the 2021 amendments to the NEPRA Act. These amendments redefined NEPRA from a statutory authority to a statutory corporation, purportedly requiring fresh notifications and reappointments of members according to new criteria.

The Court, in its detailed judgment, clarified that the 2021 amendments were clarifying in nature and did not necessitate a reconstitution of NEPRA. It emphasized that NEPRA's actions remained valid despite the absence of new notifications post-amendment. The court relied on Section 3(6) of the NEPRA Act and Section 6 of the General Clauses Act, 1897, which maintain the validity of actions taken by a statutory body even if there are defects in its constitution.

The Court held that NEPRA's change in status did not require a new notification and actions taken by NEPRA remain valid regardless of vacancies or defects. The existing members are to continue until the end of their term as per the security of tenure provisions. The timelines for tariff determinations in Section 31(7) of the NEPRA Act are directory, not mandatory. Notifications based on set-aside determinations remain effective to prevent a regulatory vacuum. Fresh determinations should involve public participation to ensure transparency. The cross objections by LESCO were dismissed as the Code of Civil Procedure does not apply strictly in these proceedings.

The Islamabad High Court found no material error in the consolidated judgment of the NEPRA Tribunal. Consequently, the appeals were dismissed, and the Court upheld the Tribunal's decision for fresh tariff determinations. This judgment ensures continuity and procedural correctness in NEPRA’s regulatory actions, maintaining stability in tariff adjustments until new determinations are made and notified.

This decision has significant implications for the energy sector, ensuring that regulatory processes remain intact and highlighting the importance of procedural adherence in statutory amendments and appointments.