Power firms incurring Rs150 billion losses

It is due to electricity theft, line losses and fewer recoveries

ISLAMABAD:

Ex-Wapda distribution companies (XWDISCOs) are incurring losses of Rs150 billion annually on account of electricity theft, line losses and fewer recoveries, noted the National Electric Power Regulatory Authority (Nepra).

During a hearing of petitions of distribution companies for the second quarter (Oct-Dec) of 2021-22, the XWDISCOs failed to satisfy the regulator on capacity payments.

In the hearing, presided over by Nepra Chairman Tauseef H Farooqui, officials said that DISCOs were incurring losses of Rs150 billion per annum on account of electricity theft, line losses and fewer recoveries.

As per initial petitions, XWDISCOs had sought Nepra’s approval for recovery of Rs42 billion from power consumers on account of various adjustments for the second quarter of 2021-22. However, some XWDISCOs revised their petitions.

Now after the revision, the recoveries demanded by DISCOs have reduced to Rs36.7 billion.

According to Nepra officials, four companies have yet to submit their revised petitions.

XWDISCOs had sought the regulator’s permission to allow the transfer of burden of Rs14 billion on account of transmission and distribution losses to consumers for the second quarter of 2021-22.

The XWDISCOs submitted a petition with Nepra, seeking recovery of Rs41.98 billion on account of various adjustments for the second quarter of FY22.

In that regard, Nepra Vice Chairman Rafique Shaikh questioned “if DISCOs are not lifting the full quota of electricity, then who is going to pay for it?”

He directed the XWDISCOs to provide a complete record of electricity sale-purchase agreements.

Pursuant to the notified tariff, the XWDISCOs had filed their requests for adjustments on account of capacity charges, transmission charges, variable operation and maintenance charges, impact of incremental units and impact of transmission and distribution losses on fuel cost adjustment (FCA) for the second quarter (Oct-Dec 2021), in line with the notified mechanism.

Of the DISCOs’ demand for Rs41.86 billion as quarterly adjustment for Oct-Dec 2021, Rs7.145 billion has been demanded on account of capacity charges, Rs16.32 billion on account of use of system charges and market operator fee, Rs14.03 billion as impact of transmission and distribution losses on monthly fuel price adjustment, while Rs5.628 billion has been sought for the supplementary CPP invoice.

On variable operations and maintenance, the companies have shown savings of Rs1.14 billion.

The data shared with Nepra indicated that Islamabad Electric Supply Company demanded recovery of Rs5.34 billion, Lahore Electric Supply Company Rs12.93 billion, Gujranwala Electric Power Company Rs4.66 billion and Faisalabad Electric Supply Company Rs4.12 billion.

Nepra has reserved its judgement and will release the decision later.

Published in The Express Tribune, April 29^th, 2022.

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