ISLAMABAD: The Auditor General of Pakistan (AGP) has asked the Federal Investigation Agency (FIA) to refrain from initiating inquiries into overbilling cases without prior technical validation and to coordinate with the National Electric Power Regulatory Authority (Nepra) and the Provincial Office of Inspection (POI).

The move aims to ensure that investigations and consumer redressal are conducted strictly in accordance with the Nepra-mandated legal framework.

These observations were made in an audit para titled “unauthorized initiation and non-finalization of FIA anti-corruption inquiries on overbilling in Lahore Electric Supply Company (LESCO) in violation of Nepra procedures.”

According to Section 38 of the Nepra Regulation of the Generation, Transmission, and Distribution of Electric Power Act, 1997, each provincial government is required to establish Provincial Offices of Inspection with powers to enforce compliance with distribution companies’ instructions regarding metering, billing, electricity consumption charges, and theft of energy. These offices are also authorized to determine disputes related to metering, billing, and tariff collection. Such powers may be exercised by Electric Inspectors appointed under Section 36 of the Electricity Act, 1910.

Section 39 of the Act provides that any interested person, including a provincial government, may file a written complaint with the Nepra against a licensee for contravention of the Act or any related order, rule, regulation, or instruction. Upon receipt of a complaint, the Nepra is required to issue a show-cause notice and provide the concerned party an opportunity to be heard before taking any action.

Furthermore, Clause 15.1.2 of the Consumer Service Manual (CSM) 2021 allows consumers to file complaints regarding metering, billing, and tariff collection with the Provincial Office of Inspection under Section 38 of the Act.

During a performance audit of FIA inquiries related to LESCO for the period 2019–2024, it was observed that FIR No. 79/2024 alleged excessive charging of 59.791 million electricity units to LESCO consumers. This figure was initially reported by the XEN Shahpur Division through a letter dated September 22, 2024. However, statements recorded from concerned officers revealed that these figures were based on assumptions provided by Sub-Divisional Officers (SDOs) without mandatory Metering and Testing (M&T) verification.

On the direction of the FIA ACC Lahore on November 18, 2024, LESCO’s Technical Committee reviewed the case and concluded that although overbilling had existed in Shahpur Division for some time, the figures mentioned in FIR No. 79/2024 were not supported by verified technical evidence. It further noted that no actual revenue loss was sustained by LESCO, as most excess billing was later adjusted. However, the company’s reputation and public trust were adversely affected.

The audit further pointed out that under Sections 38, 39, and 35-A of the Nepra Act, 1997, read with Chapter 15 of the Consumer Service Manual 2021, overbilling complaints must be handled through the Provincial Office of Inspection or Nepra’s Consumer Affairs Division, which are the legally mandated forums for investigation, adjudication, and redressal.

Additionally, under Sections 27-A to 27-C, Nepra is the competent authority to conduct inquiries and take regulatory action against distribution companies in technical, commercial, and billing matters.

The regulator has previously exercised this authority, including issuing an explanation to LESCO on July 30, 2024. Accordingly, the audit observed that criminal proceedings initiated by the FIA were not aligned with the governing legal framework, as overbilling primarily falls within Nepra’s regulatory jurisdiction.

Despite this, the FIA initiated multiple FIRs and inquiries (Nos. 27/2024, 29/2024, 30/2024, 32/2024, 34/2024, 91/2024, 142/2024, and 143/2024) related to overbilling without prior technical validation. These were later merged into a single Enquiry No. 32/2024. The audit noted that this overbroad consolidation, coupled with untimely transfers of inquiry officers, resulted in non-finalization of cases, weak evidentiary support, and compromised impartiality.

According to preliminary findings in FIR No. 79/2024, approximately 835 million electricity units were overbilled across all eight LESCO circles. LESCO acknowledged overbilling of 501 million units in three circles — First Circle, Second Circle, and Kasur Circle. During the inquiry, records obtained from XENs of the Northern Circle and the Superintending Engineer (SE) of Kasur Circle confirmed overbilling of Rs 197.71 million and Rs 86.456 million, respectively. However, despite repeated summons, no response was received from SEs of the remaining four circles, significantly delaying the finalization of the inquiry.

The audit further observed that merging all inquiries into a single case, largely based on source reports from LESCO’s own management, undermined investigative independence. Given the technical complexity, geographical spread, and scale of alleged irregularities, the scope of Enquiry No. 32/2024 was too broad for effective handling by a single inquiry officer. Untimely transfers of key FIA officers further disrupted progress, leaving several inquiries incomplete despite the availability of corroborated evidence from IT audits, field inspections, and consumer complaints.

According to the audit, the root causes of these irregularities included weak internal billing controls, non-compliance with Nepra-approved complaint procedures, and premature initiation of criminal proceedings without technical substantiation. The effects included erosion of consumer trust, reputational damage to LESCO, duplication of regulatory processes, delayed consumer redressal, and weakened deterrence against future billing malpractice.

The audit concluded that FIA proceedings lacked alignment with the applicable legal framework, under which Nepra is the primary authority empowered to investigate, adjudicate, and penalize overbilling cases. The matter was taken up with LESCO management in August 2025, which responded that a crackdown against overbilling had been undertaken in 2024. The Audit maintained that unauthorized initiation and non-finalization of FIA inquiries into LESCO overbilling violated Nepra procedures and undermined regulatory due process. It is recommended that FIA refrain from initiating overbilling inquiries without prior technical validation and should coordinate with Nepra and the Provincial Office of Inspection to ensure investigations and consumer redressal are conducted strictly under the Nepra-mandated framework.—MUSHTAQ GHUMMAN