Regulator Calls for Urgent Reforms as Power Firms’ Performance Lags


The National Electric Power Regulatory Authority (Nepra) has highlighted the poor performance of all power distribution companies (Discos), including K-Electric, during the fiscal year 2022-23. Nepra’s performance evaluation reports (PERs) revealed significant underperformance against set targets, resulting in cumulative financial losses of approximately Rs1 trillion annually and exacerbating the circular debt by over Rs350 billion.

The evaluations, based on data provided by the Discos, indicated deficiencies in areas such as technical losses, recoveries, load-shedding, safety measures, and new connections. None of the companies met parameters related to power failure frequency, complaint resolutions, or safety standards. Tragically, over 160 fatalities were reported, with 33 occurring in the KE system alone.

Nepra emphasized the urgent need for structural changes in the power sector to prevent industry closure and ensure affordable charges for consumers. Suggestions included dividing large Discos into smaller units, provincializing Discos, privatizing or corporatizing them through public-private partnerships, and reducing union influence. Modern technology adoption, outsourcing of high loss feeders, and customer-oriented approaches were also recommended.

While a few companies showed some improvement against evaluated targets, overall performance remained subpar. Actual transmission and distribution losses averaged 16.38%, with significant financial losses exceeding Rs900 billion. Despite investments to address system constraints, several Discos failed to reduce losses, contributing to substantial losses to the national exchequer.

Moreover, overall recovery rates declined to 86.26%, a decrease of nearly 4% compared to the previous financial year. The regulator expressed alarm over the non-provision of new connections, leading to unmet power demand despite ample generation capacity.

Nepra also criticized Discos for deliberately drawing less power than demanded, resulting in collective punishment for consumers. Legal proceedings have been initiated against several Discos for violating Nepra laws.

In conclusion, Nepra underscored the pressing need for reforms to enhance the efficiency and reliability of the power distribution system and ensure fair treatment of consumers.

Story by Khaleeq Kiani

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