KE aims to make 95% of Karachi outages-free

Plans to make Rs484b investment in T&D network in next seven years

ISLAMABAD:

The management of K-Electric (KE) has pledged to make 95% of Karachi free from load-shedding by investing Rs484 billion to bring improvement in its network over the next seven years.

It plans to bring transmission and distribution (T&D) losses down to 12.8% by 2030 under the investment plan.

Since privatisation, KE has pushed T&D losses down from 34.2% to 15.3% in 2022, which beat the benchmark set by the National Electric Power Regulatory Authority (Nepra).

By 2030, the power utility aims to take the city’s load-shedding exemption level to 95% compared to 75% in 2022, KE management told Nepra at a public hearing on Wednesday.

The power-sector regulator held an hours-long session to discuss KE’s investment plan, which included capital injection into power generation and distribution, prevention of incidents and cyber security.

Nepra completed its hearing on KE’s seven-year investment plan covering the period from FY24 to FY30. The hearing was attended by a large audience in person and online including the representatives of industries and financial sector as well as senior community activists.

KE has filed separate tariff petitions for power generation, transmission, distribution and supply business.

At the hearing, KE CEO Moonis Alvi pointed out that the investment plan had been drawn up while keeping in view imminent changes in the power sector such as the liberalisation of market.

He said that KE was embracing competition and had filed request for a non-exclusive distribution licence.

Alvi emphasised that the plan would maintain balance between the affordability, availability and sustainability of power supply, which “is considered today’s trilemma”.

When Nepra asked about future plans to address challenges such as load-shedding and theft, KE shared details of investment and projects being undertaken to slash losses and ensure stable power supply to a growing number of consumers.

Adoption of Aerial Bundled Cables and technology such as advanced distribution management system were cited as measures that would further reduce T&D losses.

Responding to a question from the audience, KE CEO stated that T&D losses had been reduced from around 38% to 15%.

Documents on KE’s website show salient features of its investment plan which include the addition of 1,182 megawatts of renewable energy. The company’s presentation revealed that it was planning to slash power generation by thermal plants from approximately 90% to 50%.

Greater transparency was mentioned as reason for the separate tariff petitions. Compared to the previously applied tariff, the current petition has provision for review after every two years.

KE management explained that it would allow flexibility and make changes to the scope of investment aligned with the prevailing macroeconomic situation.

Central Depository Company Board of Directors Chairman Moin Fudda stated that it was important to bring KE’s legacy challenges to a close such as the receivables of Rs400 billion.

He requested the Planning Commission and PM’s task force to pay attention to the matter. “Filing for a non-exclusive licence is a positive step, which should be acknowledged,” he stressed.

Under the seven-year investment plan, KE is aiming to make investment of Rs484 billion, of which Rs177.85 billion will be invested in growth and expansion programme. Apart from that, Rs99.41 billion will be invested in interconnection facilities and N-1 contingency.

An amount of Rs67.83 billion will be spent on loss reduction, Rs64 billion on maintenance and Rs29 billion on safety. KE also pledged Rs26.21 billion for technological advancement and Rs18.51 billion for IT and cyber security.

Public accident prevention programme is a key feature of the plan to ensure continued safety. KE plans to increase the recovery of bills. As of FY22, its recovery ratio stood at 96.7%.

Published in The Express Tribune, March 2^nd, 2023.

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