NEPRA alarmed by 11% drop in electricity sales

NEPRA warns of a growing crisis as declining power sales risk undermining the financial stability of the energy sector

Electricity sales in Pakistan have seen an alarming 11% decline in the first quarter of the current fiscal year, driven by soaring energy costs and increased adoption of solar power.

The National Electric Power Regulatory Authority (NEPRA) has expressed serious concerns over the trend, which threatens the financial sustainability of the power sector, Express News reported.

During a hearing on fuel adjustment charges, NEPRA revealed startling figures, with distribution companies (DISCOs) across the country reporting double-digit drops in electricity sales.

The Quetta Electric Supply Company (QESCO) reported the sharpest decline, at nearly 19%, followed by MEPCO (15.76%), FESCO (14.48%), PESCO (14.47%), and LESCO (8.41%). Even smaller declines, such as SEPCO’s 5.62% and HESCO’s 4.54%, point to a widespread issue.

NEPRA noted that the reduction in sales is exacerbating financial pressures on the energy sector. “If electricity sales had met targets, consumers could have saved an estimated Rs60 billion,” the regulatory authority stated, warning that the decline has increased the financial burden on consumers through higher costs.

The trend has been attributed to the rising cost of electricity, which has pushed many households and businesses to switch to solar energy. FESCO officials reported that a significant portion of their region’s energy consumption has shifted to solar-powered systems, especially in agricultural areas where tube wells are now largely solarised.

NEPRA member Rafique Ahmed Shaikh underscored the urgency of reform, describing the current distribution company model as unsustainable. “The solution lies in privatisation. Without it, this system will not survive, no matter how much effort is made,” he said.

K-Electric, serving Karachi, reported a comparatively modest 2.7% decline in sales during September and October. This prompted NEPRA officials to question whether solarisation is less prevalent in Karachi or whether other factors are at play.

“Other regions are citing solarisation as a major factor for sales decline. Why is Karachi showing such a starkly different trend?” asked Rafique Ahmed Shaikh, calling for a closer analysis of regional differences.

Adding to the challenges, DISCOs have faced allegations of “forced load-shedding” to manage reduced sales. NEPRA has demanded detailed reports from all DISCOs on power outages in their regions to determine the validity of such claims.

As the power sector grapples with these challenges, NEPRA emphasised the urgent need for restructuring.

It has completed its hearing on DISCOs' fuel adjustment requests and is now considering measures to address the financial and operational crisis in the sector.