KCCI requests Nepra to reconsider proposed hike in security deposits

KARACHI: The Karachi Chamber of Commerce and Industry (KCCI) has urged the National Electric Power Regulatory Authority (Nepra) to suspend the proposed increase in security deposit rates by Distribution Companies (Discos) until all relevant information is transparently shared with stakeholders.

It also called for an inclusive and meaningful consultation process to ensure that any decision considers the financial constraints of both consumers and businesses. In a letter to the NEPRA registrar, KCCI President Muhammad Jawed Bilwani said that members of the business community, trade bodies and consumers have expressed serious concerns over petitions filed by various ex-Wapda Discos seeking a significant increase in security deposit rates for power connections. He warned that, if approved, these proposals would place an excessive financial burden on consumers, businesses and industries nationwide.

Bilwani highlighted that Discos have sought Nepra’s approval to revise security deposit rates based on electricity consumption, property size and even market value. He cautioned that such a drastic increase -- without a transparent and well-communicated justification -- would create additional financial hardships for consumers and businesses already struggling with soaring electricity tariffs and economic pressures.

“The proposed increase, such as raising B2 security deposits from Rs2,010 per kW to Rs54,783 per kW, is excessive and financially unviable,” he remarked. He added that such an unbearable hike in security deposits would leave consumers with no choice but to switch to self-generated electricity via solar power, pushing Discos into crisis as their consumer base shrinks.

The KCCI president stressed that any revision must undergo an extensive consultation process involving all relevant stakeholders, including trade bodies, chambers of commerce and consumer associations. A thorough impact assessment is essential before implementing any measures that could further strain businesses and consumers.

Bilwani also pointed out that Discos and K-Electric (KE) have already collected security deposits amounting to approximately four times the maximum demand and seven times the average demand of consumers. He revealed that KE, for instance, has collected security deposits equivalent to a sanctioned load of 13,000 megawatts (MW). However, even at peak times, the highest electricity demand reaches only 3,500MW, while under normal conditions, it averages between 2,200MW and 2,400MW.

“This clearly demonstrates how excessively the utility has exploited people by imposing unfair security deposits,” he said, adding that the situation is similar across the country, where all Discos have sanctioned a total load of 97,800MW, whereas national peak electricity demand reaches only 23,000MW.

In another letter to the Nepra registrar, Bilwani called on the regulator to direct all Discos to conduct a comprehensive audit of security deposits and consumer contributions, ensuring public disclosure of these funds. He stressed the need for a detailed report on the total security deposits held by each Disco, along with a breakdown of how these funds have been utilised over time.

He insisted that any interest earned on consumer security deposits must be accounted for and returned to consumers in line with regulatory obligations. Bilwani also highlighted that consumers directly finance a significant portion of power infrastructure, including installations at all voltage levels and contributions to grid-sharing costs. These consumer-funded assets are then transferred to Discos at no charge, raising concerns about their inclusion in the Regulated Asset Base (RAB). He urged Nepra to ensure that Discos are not unfairly earning returns on assets financed by consumers.