"Decision on cold storage tariff delayed by Nepra"
Revised Article:
SITUATION UPDATE: Nepra's Delay in Addressing Cold Storage Tariff Review Sparks Controversy
Last year, the National Electric Power Regulatory Authority (Nepra) made a decision regarding the tariff for Cold Storage facilities that's causing a stir. A citizen of Karachi, Arif Bilwani, has taken action and filed a Motion for Leave for Review (MLR) against Nepra's decision. The case is now in a tricky spot due to the Nepra Appellate Tribunal's decision that requires Nepra to re-examine the case.
On December 30, 2024, Bilwani filed the MLR under Rule 3(2) of Nepra's (Review Procedure) Regulations, 2009, contesting the decision regarding the application of the tariff category for Cold Storage.
In a recent letter to Registrar Nepra, Bilwani pointed out the issue, where the Authority accepted his MLR after an eight-week delay through a letter of February 13, 2025. Yet, since then, there's been no update or progress from Nepra.
Legal Tangle: A Test for Nepra's Timeliness
"It's baffling why the hearing isn't scheduled yet, considering more than four months have passed since the acceptance of the MLR," Bilwani said in his letter.
He requested Nepra to promptly schedule the MLR hearing, as Cold Storages are losing substantial financial resources due to the incorrect Commercial Tariff, a result of the contested decision being reviewed.
In the MLR of December 30, 2024, Bilwani expressed concerns about Nepra's decision, made by the Chair through a casting vote despite dissenting notes from two learned members, including the Member Legal. He also questioned if reasonable notice was served to the Member Tariff whose input was crucial, given this case's nature.
Arif Bilwani shared that he had actively engaged in Nepra's public hearings, including those in 2023 for various Discos (PESCO, TESCO, GEPCO, and MEPCO). During these sessions, he presented detailed arguments distinguishing modern cold storage units from traditional ones.
Modern Cold Storage: Industry at Stake
Modern cold storage facilities offer vital value-added services to various sectors, including food security, health security, and export facilitation. Nepra's proposed classification as merely serving grocery chains and retail businesses falls short of acknowledging the complexity and technical nature of modern cold storage operations.
These facilities involve extensive investments, advanced electromechanical processes, and precise temperature and humidity control to preserve perishable goods, support pharmaceuticals, and extend product shelf life.
Delaying the hearing on the MLR and neglecting to reconsider the categorization of modern cold storages as commercial consumers could raise electricity costs for industries reliant on these services, particularly exporters. The Pharma sector, another prominent user of such facilities, would also face challenges in maintaining production of life-saving medicines.
In summary, Arif Bilwani is championing the recognition of modern Cold Storage as an industrial activity, claiming it would stabilize industry operations and avoid unnecessary financial losses in different sectors. The future of Nepra's decision is uncertain as it grapples with the public outcry and legal complexities surrounding this issue.
[1] Nepra member disagreements on cold storage classification[2] Nepra decision criticized for snubbing industrial status for cold storage facilities[3] Nepra Appellate Tribunal directive for re-hearing on cold storage tariff[4] Unresolving Delay in Nepra's Cold Storage Tariff Review Hearing
- The current standoff between Arif Bilwani and Nepra over the tariff for Cold Storage facilities has unfolded potential risks for investments in the modern cold storage industry, given the unresolved delay in the re-hearing of Nepra's decision.
- The legal battle centered on Nepra's classification of modern cold storage as a commercial consumer, with concerns over the value it delivers to various sectors, such as food and health security, and export facilitation, that could be adversely affected by increased electricity costs.
- In the financial realm, the delay in Nepra's reconsideration of the tariff for modern cold storage facilities poses a significant debt burden on these industries, particularly exporters and the Pharmaceutical sector, due to the potential hike in electricity prices.
