Power firms swallow billions of rupees

Power distribution companies (DISCOs) have eaten up billions of rupees collected from electricity consumers in the name of installing earthing systems to avoid fatal incidents in future.

The shocking disclosure was made at a public hearing conducted by the National Electric Power Regulatory Authority (Nepra) on Thursday. On the occasion, Nepra, the power-sector regulator, cautioned DISCOs that it was working on a regulation which would slap penalty on officials involved in illegal deduction and disconnection of meter connections.

The regulation will also ensure the replacement of transformers at certain times and if a company fails to replace them it will be fined. “The amount of fine will go into the pockets of consumers,” Nepra announced.

The regulator has started a probe to unearth where billions of rupees, collected from consumers for the earthing of electric poles, were invested by DISCOs. Ground earthing is necessary because of the electricity system in Pakistan.

The public hearing was informed that the regulator had earlier sought reports from all DISCOs on the execution of a project for the earthing and grounding of high-tension and low-tension (HT/LT) poles/structures.

Nepra authorities revealed that responses received from the power companies were not satisfactory.

The regulator noted that they had not submitted a plan for installing the earthing systems. Consequently, random checks found that either the earthing system was missing or its results were not according to the set standards.

Keeping that in view, the regulator decided to initiate legal action against the power companies. It reviewed cases of different companies in order to penalise them.

While hearing the case of Lahore Electric Supply Company (Lesco), the regulator was informed that the company had 670,000 pole structures but more than 60% had no earthing system. For the remaining 40% poles too, there was no proper earthing system in place. In random checking by Nepra’s regional offices, it was found that earthing cost had been included in the demand note given to consumers but the amount was not spent on the earthing of electric poles to shield people from fatal accidents. Nepra authorities indicated that they would impose a fine of Rs10 million on Lesco.

The regulator also inquired where the money went which had been collected from the consumers. Lesco CEO Shahid Haider clarified that the company’s system was old, which was why the earthing system was missing. “Seasonal effects have also damaged the system,” he said.

He disclosed that the company had submitted a two-year plan to the regulator for the earthing of 356,000 poles. Nepra countered that Lesco had failed to perform its duty of providing electricity to consumers, adding that the consumers had paid the cost but the earthing system was not installed.

“Whether any action has been taken against the company officials; where the earthing money charged from consumers has gone,” it asked.

Nepra directed the company to submit a report detailing the investment made in poles and the money received from consumers. The report should be vetted by a third party. It was informed that Gujranwala and Multan electric power companies had also been directed to submit similar reports.

In the case of Peshawar Electric Supply Company (Pesco), the regulator was told that Pesco had 400,000 poles in its jurisdiction, which required Rs800 million for earthing.

Pesco insisted that it would complete the earthing work in 2024 but Nepra did not find its action plan realistic.

It was noted that the CEO should give a written note for taking responsibility of fatal incidents in future. The regulator slapped a fine of Rs0.5 million on Pesco due to the absence of the company’s CEO. While discussing the performance of Faisalabad Electric Supply Company (Fesco), the hearing was informed that the company had earthing system on 50% of poles. Fesco officials said that the company had completed a survey according to which 130,000 poles had no earthing, adding that they would install the system with the help of company resources. Separately, officials of Tribal Areas Electric Supply Company (Tesco) argued that they were facing shortage of funds as Nepra had allowed only Rs29 million for repair and maintenance work. Tesco has already raised the issue of low allocation of funds and filed a review petition.

Published in The Express Tribune, August 18^th, 2023.

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