The national exchequer has to bear a whopping Rs 170 billion financial loss on account of low collection of revenues due to poor governance/ management by some of the distribution companies (Discos) for the financial year 2021-22 (FY21-22).
Around Rs. 2.517 trillion were collected against the billed amount of Rs. 2.686 trillion in the year under review, depicting a total loss of around Rs. 170 billion that has to be suffered by the national kitty for FY21-22, said the National Electric Power Regulator Authority’s (Nepra) Performance Evaluation Report [of Distribution Companies] for FY21-22.
The highest contributor is Quetta Electric Supply Company (QESCO) followed by Sukkur Electric Power Company (SEPCO) and Hyderabad Electric Supply Company (HESCO). It is evident that less recovery of such a huge amount has mainly contributed to increasing the circular debt of Pakistan.
T&D Losses & Recovery:
GEPCO, FESCO, MEPCO and K-Electric have achieved the Nepra-determined targets and compensate the financial loss of other Discos to be suffered by the national exchequer on account of the breach of NEPRA targets.
IESCO has just missed the Nepra target which has a very minute impact. Whereas, PESCO, QESCO, SEPCO, and HESCO are far away from the targets set by Nepra and largely contributed in an overall loss of Rs. 122 billion to be borne by the national exchequer.
PESCO’s share is the highest among all Discos followed by HESCO in this regard.
Similarly, with respect to recovery GEPCO, FESCO and MEPCO have also collected maximum revenues against billed amounts and marked their recoveries almost near to 100%.
IESCO and K-Electric have also reported more than 95 percent whereas; HESCO and SEPCO remained in middle somewhere as compared to the target of 100 percent. QESCO’s performance has been pointed out as worst in this regard with the recovery of 35 percent only.
Collectively, Disco’s data reveals that most of the Discos except GEPCO, FESCO, QESCO and K-Electric provided new connections to more than 95 percent of its eligible consumers. It is important to mention here that Nepra has established an online portal whereby, all Discos are required to submit data pertaining to the pendency of ripe pending connections on monthly basis.
The Authority considered the monthly reports and based on the report for the month of Dec 2022, it was observed that around 500,000 connections were pending due to a load of 1870MW could not be injected.
The Authority took serious notice and directed to initiate legal proceedings against Discos. Explanations were sought from Discos and hearing opportunities were also given wherein, it was revealed that this huge pendency occurred due to inflation, variation in dollar price, and non-participation of bidders in the tendering process.
As a result of that, around one million new connections were provided to the eligible consumers and a total load of more than 3000MW was served
Data related to T&D losses, recovery, and AT&C losses were obtained from Discos for the last four years and after a thorough examination, it was assessed that no significant improvement has been made by the Discos especially PESCO, QESCO, HESCO, SEPCO, and K-Electric.
It is further added that carrying out AT&C-based load shedding is an easy path for Discos rather taking some efforts to get rid of such a so-called policy. Moreover, Nepra is also of the view that Discos should establish their writ at least in its urban areas, and lift up such AT&C-based load shedding by ensuring minimum losses and maximum recovery in such types of pockets.
Discos can do this exercise by taking some concrete measures such as identification of high loss areas, surveillance/controlling of such illegal activities, installation of ABC cable, installation of AMI/AMR meters at PMT level, etc.
For K-Electric, Nepra has issued directions to carry out load shedding (if any) at the PMT level rather than feeder level as it has installed around 50K AMI/AMR meters on all PMTs in its service territory.
Nepra laws clearly state that Discos can never carry out load shedding on their own until & unless there is a generation shortage in the country or there are transmission system constraints.
The data submitted by Discos illustrates that a total number of 3,998,033 complaints were received by the Discos in FY 2021-22 regarding voltage fluctuations and other issues. Some of the Discos have received less number of complaints despite the fact that their operational performance is not up to the mark which is reported in media on regular basis and also physical complaints being received by NEPRA in this regard. This means that there is no proper complaint-handling mechanism and even no reporting system.
It is a matter of serious concern that SEPCO did not receive a single complaint in a day in each of its complaint centre. Nepra has serious reservations over the data reported by XWAPDA Discos.
Out of the total number of complaints, around 46 percent were received by KE alone which shows that it has a proper system so that every consumer can approach KE and register their complaint.
FY 2021-22 portrays the dreadful picture with respect to a number of fatalities both for employees and the public occurred in all distribution companies i.e., 196 which is around 11 percent more than the last year. During the reported period, PESCO’s share remained high followed by HESCO, K-Electric, and IESCO.
Discos have been heavily fined by Nepra. Further, Discos have also been directed to provide compensation to the bereaved families equal to the amount given to its employees along with a job to next of their kin.
During investigations, it was disclosed that some of the accidents occurred in Discos due to a lack of earthing/ grounding of poles/structures of Disco’s distribution system. The Authority took serious notice of the situation and directed all Discos to submit the detail of poles/structures to be earthed along with a concrete plan.
The implementation of the same is under process. It is a matter of record that the same exercise has already been done by KE upon instructions of the NEPRA Authority and around 216,000 poles/structures were grounded.
The regulator said that the performance of distribution companies throughout this period remained below par and power sector reforms could not be achieved. Keeping in view the continuous poor performance, it is evident that under the given circumstances, the existing Disco’s set up would not be able to deliver. In this regard, structural changes at a mega scale such as the closure of PPMC, bifurcation of large Discos, provincialization of Discos, privatization/ corporatization of Discos, and reduction of the Union’s influence are required.