Recovering cost of theft: NEPRA dismisses request of power distribution companies

IESCO, HESCO and QESCO were seeking to recover cost of theft from consumers

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has turned down the plea of power distribution companies that wanted to put an additional burden of billions of rupees, caused by electricity theft, on honest consumers that are paying their bills regularly.

Three distribution companies - Islamabad Electric Supply Company (Iesco), Hyderabad Electric Supply Company (Hesco) and Quetta Electric Supply Company (Qesco) - had in their review petitions asked the regulator to allow an increase in the loss ceiling so that they could recover the cost of power theft from the consumers. However, the regulator turned down the request.

In the case of Iesco, the regulator, which had allowed recovery of 9.39% losses for financial year 2015-16, has significantly reduced the target for 2016-17 to 2019-20.

Nepra, while considering the proposed reduction of 0.1% in transmission and distribution (T&D) losses in five years being illogical and keeping in view the requested investment, agreed on a more accelerated reduction in losses from 9.44% in 2014-15 to 7.8% in 2019-20, a decrease of 1.64 percentage points.

In its petition, Iesco pointed out that Azad Jammu and Kashmir (AJK) had owed Rs37.8 billion by the end of August 2015, which was the result of a difference between the tariff applied by the petitioner and the rate at which payments were made by the region.

The AJK was making payments at the rate of Rs2.59 per unit whereas Iesco was billing the region according to the tariff determined by Nepra. The power utility requested a revision in the tariff to avoid the piling up of receivables in the future.

Hesco

The power utility requested the regulator to review the determined T&D loss target of 20.5% for 2015-16, arguing its assessment based on the T&D losses for 2014-15 was irrational. Its actual loss for the period stood at 27.1%.

Last year, the petitioner pointed out, there was significant addition of power transmission lines and transformers, which led to an increase in the T&D losses.

This meant that the company would have to cut its losses by 6.6% points this year, which it said was not practically possible as already nine months had passed. It asked the regulator to set the target of T&D losses at 26.30%.

Qesco

Nepra noted that it had set the end-consumer tariff for the company on March 25 this year, but the petitioner later filed a motion seeking a review of the tariff with a request to revise the target of T&D losses from 17.5% to 22.7%. However, the regulator turned down its plea as well. 

Published in The Express Tribune, May 20^th, 2016.

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