Pakistan's Electric Power Regulator Facing Legal Heat Over Cold Storage Classification
"Decision on cold storage tariff is being postponed by Nepra"
Karachi, Pakistan: Pakistan's National Electric Power Regulatory Authority (Nepra) is wrestling with a troublesome Motion for Leave for Review (MLR) regarding the tariff for Cold Storage facilities. The current predicament arises from a decision made by Nepra's Appellate Tribunal, which has left the regulatory body in a tight spot, demanding a re-hearing of the case.
Arif Bilwani, a local resident, filed his MLR on December 30, 2024, contesting Nepra's classification of cold storage facilities under the commercial tariff category. The delay in addressing his concerns has been unacceptable, as more than four months have passed since the acceptance of his MLR, and there has been no progress or communication from Nepra.
In a letter to the Registrar of Nepra, Bilwani pointed towards the regulatory body's reluctance to schedule the hearing, even after recognition of Cold Storages as an industrial activity by the Ministry of Industries & Production, the Federal Cabinet, and the ECC on March 05, 2025.
Bilwani emphasized the substantial financial losses Cold Storages are facing due to the imposed incorrect Commercial Tariff, stemming from the contested Nepra decision. These storage facilities provide critical services to various industrial and commercial sectors, ensuring food security, health security, and enhancing export capabilities. The misclassification places an undue burden on these facilities.
In his MLR, Bilwani cited the Authority's decision made via a casting vote by the Chair, with dissenting notes from two learned members, including the Member Legal. He further noted that there were questions about procedural compliance and the validity of the decision-making process due to the Member Tariff's absence from the final meeting.
Drawing attention to Nepra's decision-making shortcomings, Bilwani highlighted issues with the Authority's understanding of modern Cold Storage operations and their technical operations, which are significantly different from traditional cold storage facilities.
Modern cold storage facilities utilise advanced electromechanical processes to maintain the physical, chemical, and nutritional properties of goods, extend their shelf life, and support critical industries, like pharmaceuticals, where precise temperature control is essential for life-saving drug production.
Bilwawa also underlined the fact that categorizing modern cold storages as commercial consumers would increase electricity costs for industries that rely on these services, making them less competitive in local and international markets.
Industries like Pharmaceuticals that manufacture critical medicines require specialized storage facilities like cold storage to ensure their active ingredients' availability and stability. The misclassification could pose a threat to these critical operations.
The ongoing legal proceedings bring Nepra's tariff policies under the microscope, raising questions about potential misalignments between tariff policies and broader governmental industrial classifications.
- The position of Pakistan's National Electric Power Regulatory Authority (Nepra) has been challenged by a Motion for Leave for Review (MLR) regarding the tariff for Cold Storage facilities in 2025.
- Arif Bilwani, a local resident, contests Nepra's classification of cold storage facilities under the commercial tariff category, citing the industry's critical role in food security, health security, and export capabilities.
- Delay in addressing Bilwani's concerns has led to substantial financial risks for Cold Storages, facing losses due to the imposed incorrect Commercial Tariff.
- The Ministry of Industries & Production, the Federal Cabinet, and the ECC recognized Cold Storages as an industrial activity on March 05, 2025, but Nepra's Appellate Tribunal's decision demands a re-hearing of the case.
- In his MLR, Bilwani questions the Authority's understanding of modern Cold Storage operations, which are significantly different from traditional cold storage facilities, and the validity of the decision-making process due to procedural compliance issues.
- Modern cold storage facilities, like those in the pharmaceutical sector, utilize advanced electromechanical processes to maintain temperature for life-saving drug production and support the industry's competitiveness.
- The ongoing legal proceedings between Arif Bilwani and Nepra raise questions about potential misalignments between Nepra's tariff policies and broader governmental industrial classifications, with implications for finance, energy, and business sectors in 2025.
