KARACHI: The Karachi Chamber of Commerce & Industry (KCCI) has strongly urged the National Electric Power Regulatory Authority (NEPRA) to put on hold the proposed hike in security deposit rates by Distribution Companies (DISCOs) until full transparency is ensured and an inclusive consultation process is undertaken with all stakeholders.
KCCI emphasized that such a move could impose severe financial hardships on both businesses and consumers.
In a formal letter addressed to the Registrar of NEPRA, President KCCI Muhammad Jawed Bilwani highlighted the growing concerns of the business community regarding the recent petitions submitted by various Ex-WAPDA Distribution Companies (DISCOs) seeking an exorbitant increase in security deposit rates. He warned that approving these proposals without a thorough assessment would create undue financial burdens for businesses, industries, and consumers nationwide.
KCCI pointed out that DISCOs have proposed revising security deposit rates based on electricity consumption, property size, and market valuation. Bilwani strongly criticized this drastic increase, citing the financial struggles of consumers amid rising electricity tariffs and economic pressures. He noted that raising B2 security deposits from Rs 2010/ KW to Rs 54,783/ KW is an unjustifiable and excessive hike, compelling consumers to seek alternate energy solutions such as solar power, which could lead to severe financial distress for DISCOs due to diminishing consumer bases.
President KCCI underscored the importance of a comprehensive stakeholder consultation before implementing any revision in security deposits. He called for an extensive impact assessment, stressing that trade bodies, consumer associations, and chambers of commerce must be involved in the decision-making process.
Furthermore, KCCI revealed that DISCOs, including K-Electric, have amassed security deposits far exceeding actual electricity demand. Bilwani stated that K-Electric alone has sanctioned a total of 13,000 megawatts, whereas peak demand only reaches 3,500 megawatts, with average demand fluctuating between 2,200 and 2,400 megawatts. He asserted that such practices unfairly burden consumers by imposing inflated security deposits.
In an additional letter to NEPRA, KCCI demanded that all DISCOs conduct a transparent audit of security deposits and consumer contributions. Bilwani urged NEPRA to mandate public disclosure of these funds, including a comprehensive report detailing the total security deposits held by each DISCO, including K-Electric. He insisted that any interest generated from consumer security deposits must be accounted for and returned to consumers in compliance with regulatory obligations.
KCCI also highlighted that consumers directly finance a significant portion of the power sector infrastructure, covering installations across voltage levels and contributing to grid-sharing costs. These consumer-funded assets are then transferred to DISCOs without charge, raising serious concerns about their inclusion in the Regulated Asset Base (RAB). Bilwani stressed that NEPRA must ensure that DISCOs do not unfairly generate returns on consumer-financed assets, calling for a publicly accessible audit report to verify transparency.
According to KCCI, the lack of clarity surrounding security deposits has broad implications for the power sector. Mismanagement or unwarranted retention of consumer funds distorts cost structures, leading to potential tariff hikes and inefficiencies in infrastructure investment. “A transparent audit will enhance public trust, enforce regulatory compliance, and contribute to a more equitable power sector,” Bilwani concluded.