NEPRA blamed the distribution companies (Discos) for damaging the government’s vision of an improved road map; through over-billing in order to hide their inefficiencies and high system losses. The regulator mentioned in its State of Industry Report 2019 that persistence of existing load-shedding policy in areas with high loss choked sales growth and surged energy costs. It also warned that the bad governance would not only badly affect the sector’s overall performance but also obstruct the economy of the country.
The report also noted that during November to March for the last two years the percentage losses went dramatically up and down that were difficult to understand and explain however it was quite obvious that the Discos made adjustments to exhibit their improved performance in connection with loss position.
Discos are still busy in manipulating the electricity units to manage distribution losses, claimed NEPRA
The regulator unveiled that Discos were still busy in manipulating the electricity units so that they might manage their distribution losses which were much higher as they were not able to reduce their transmission and dispatch losses. The data for past five years disclosed that only a 0.6 per cent reduction could be achieved in FY2018-19 which was much lesser than the previous year.
Islamabad, Faisalabad, Gujranwala, Lahore, Peshawar and Hyderabad went down in their recoveries whereas Tribal, Multan, Sukkur and Quetta showed little improvement.
The report stated that the energy ministr Umar Ayub had claimed 15.5pc higher amount in recoveries over the last year’s amount collected. Although, the units sold increased by only 2.16pc over the last year; the amount billed and collected was 13.22pc more than FY2017-18. The incremental amount billed was because of upsurge in consumer’s tariff. The notification of this increment was pending since 2015-16 however it was notified in March 2018 so the Discos exhibited miserable improvement in recoveries and losses.
The report noted that almost 6pc increase per year was attained for units sold from 2015 to 2017. Although during FY2017-18, the units sold reported an escalation of over 12.5pc but abruptly dropped to around 2pc during FY2018-19. “The key to the survival and growth of the power sector is solely based on the enhancement in energy sold as it helps in reducing the capacity costs and thus lowering the overall energy cost”, NEPRA report stated.
The key to the survival and growth of the power sector is the enhancement in energy sold, NEPRA report stated
The regulator affirmed that the power sector was facing extreme financial pressure for its high cost of electricity supply and distribution sector’s poor performance. Along with the higher costs there were dwindling energy sales which ultimately resulted in higher cost for the end-consumers; further hampering energy usage.
The overall receivables of all Discos increased by 50 percent to Rs248.85bn which were recorded Rs166.26bn in FY2017-18. On June 30, 2019 the overall receivables of distribution sector were reported to be Rs1.145trn against Rs896bn at the beginning of the financial year.
NEPRA expressed its disappointment over licensees for completely ignoring the regulator’s directions of providing some control to the public sector entities that was required under the reform process. The regulator also regretted that the Federal Government has not sanctioned the National Electricity Policy which it was required to approve under the NEPRA Amendment Act, 2018. This delay in approval led the power sector to uncertainty and insecurity.
The regulator also expressed dissatisfaction over K-Electric’s performance as it could not increase its generation capacity despite having an integrated system of generation, transmission and distribution.