Nepra approves dual tariffs for cold storage industry after legal disputes

The National Electric Power Regulatory Authority (Nepra) has approved two separate tariffs for the cold storage industry, depending on the nature of their business operations, following a prolonged legal dispute, Business Recorder reported. 

The power regulator has issued its final determination, distinguishing two categories within the cold storage sector:

1. Industrial Tariff: For cold storages involved in processing, value addition, and long-term preservation, particularly in agriculture, food processing, and pharmaceuticals.
2. Commercial Tariff: For cold storages engaged in short-term storage for retail and distribution, without significant value addition.

Earlier, Nepra on June 2, 2022 placed cold storage facilities under the “Commercial Tariff” category, a move that was later notified by the federal government on July 25, 2022. 

However, several cold storage operators objected to this decision, arguing that the imposition of commercial tariffs significantly increased their operational costs. They requested the application of industrial tariffs instead, citing the nature of their operations.

In response, Nepra held a public hearing on June 6, 2023, attended by various stakeholders, including representatives from distribution companies (DISCOs) and the All Pakistan Cold Storage Association. 

Meanwhile, multiple industrial consumers also filed a case before the Lahore High Court, challenging Nepra’s decision regarding the tariff and Fuel Price Adjustment (FCA). On February 6, 2023, the Lahore High Court ruled that Nepra could not change the tariff type from industrial to commercial without first hearing from the affected consumers.

The Supreme Court later remanded the matter back to Nepra, directing the authority to make an independent decision, unaffected by previous judgments. Both Nepra and DISCOs agreed to this approach, which led to further deliberations within various ministries and forums.

While the decision was welcomed by some, Amina Ahmed, Nepra’s Member (Law), raised concerns about potential ambiguity in the ruling. She warned that inconsistent interpretations of the tariffs could lead to future conflicts and disputes.