Power companies endured Rs45b loss in FY18

NEPRA report says they also failed to recover Rs78b in consumer bills


Zafar Bhutta July 07, 2019
PHOTO: REUTERS

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has expressed serious concern over line losses and lower-than-expected recovery of electricity bills by the power distribution companies.

According to the Performance Evaluation Report of Power Distribution Companies for fiscal year 2017-18 released by Nepra, the distribution companies contributed a loss of more than Rs45 billion during the year on account of transmission and distribution (T&D) losses whereas they failed to recover Rs78 billion against the bills charged.

An examination of T&D losses revealed that none of the distribution companies, except for the Islamabad Electric Supply Company (Iesco), could meet the regulator’s expectations.

It is pertinent to mention that T&D losses of Peshawar Electric Supply Company (Pesco) were 38.1% against the 27.62% allowed by Nepra.

Keeping recovery of bills in view, Multan Electric Power Company (Mepco) and Islamabad Electric Supply Company (Iesco) performed better whereas Quetta Electric Supply Company (Qesco), with a recovery rate of 46.1%, stood at the lowest level among all the distribution companies in FY18.

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On the other hand, K-Electric (KE) continued to take the lead by reducing T&D losses from 25.3% in 2013-14 to 20.4% in 2017-18.

Over the years, the performance of Pesco, Faisalabad Electric Supply Company (Fesco) and Hyderabad Electric Supply Company (Hesco) has remained worst in this indicator. The report suggested that T&D losses could be reduced further by adopting automated metering infrastructure.

The report acknowledged that as per figures submitted by the distribution companies, the distribution system of Pesco, Qesco, Hesco and KE seemed very healthy.

However, during visits by a Nepra team, the regulatory authority had found deteriorating condition of distribution networks of some of the distribution companies in the past.

Recovery rates of Qesco, Iesco, Gujranwala Electric Power Company (Gepco), Fesco, Lahore Electric Supply Company (Lesco) and Multan Electric Power Company (Mepco) fell whereas Pesco, Sukkur Electric Power Company (Sepco), Hesco and KE showed a marked improvement in recoveries in the past three years.

The report suggested that through good governance and management techniques, the distribution companies could further improve recovery rates.

SAIFI and SAIDI

Considering System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI) indicators, Sepco’s performance was the worst of all with the number standing at 568, followed by Mepco and Hesco with 316 and 180 respectively. On the other hand, Pesco, Lesco, KE and Qesco exhibited significant improvement.

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The regulator noted with concern huge variations in SAIDI numbers and was of the view that reliable power could be supplied to end-users by improving SAIFI and SAIDI through regular maintenance of the distribution system.

New connections

In comparison to 2016-17, Pesco, Fesco, Lesco, Qesco and KE showed improvement in the provision of new power connections in 2017-18.

Iesco showed zero pendency for new connections, which was far from ground realities. Nepra team expressed serious concern over the large number of pending applications during visits to different distribution companies.

Load-shedding

In terms of reduction in average daily load-shedding hours in comparison to 2016-17, Fesco, Lesco, Mepco, KE and Hesco displayed improvement whereas Gepco ranked the worst with 11 hours of daily load-shedding, followed by Qesco and Pesco with 5.8 and 3.25 hours respectively.

It is of serious concern that the data submitted by some distribution companies was not based on facts, which was verified by the Nepra team during visits to different distribution companies and subsequent actions were also initiated. Furthermore, the data itself indicated surprising results, which were hard to believe. For example, Iesco reported SAIFI at 0.04, which meant that an individual customer experienced 0.04 interruption on average during the year 2017-18, which was beyond factual position.

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Consumer complaints

The number of complaints received by the distribution companies over the last five years through different modes indicated a mixed trend with Lesco, Qesco, Sepco, KE and Hesco receiving a huge number of complaints in 2017-18 compared to 2016-17.

The data provided by the distribution companies showed that except for Gepco, Lesco and KE, all other companies did not receive even two complaints on average per complaint centre per day. This is not rationalised as the same was verified by the Nepra team during visits to different distribution companies.

Safety

Gepco reported the highest fatal accidents ie 29 in 2017-18, followed by Lesco, Iesco, Mepco, Sepco and Hesco with 21, 20, 17, 17 and 15.

Nepra noted with serious concern that these companies failed to adhere to the safety procedures and develop a safety culture. Distribution companies are required to prioritise safety as of the losses and recovery.

Published in The Express Tribune, July 7th, 2019.

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