Nepra’s public hearing: KE seeks licence renewal amid stakeholders’ opposition

ISLAMABAD: Amid opposition from stakeholders to grant power distribution and supplier license to only one company, K-Electric (KE) appeared before the National Electric Power Regulatory Authority (Nepra) on Tuesday for seeking the renewal of its license.

Nepra had provisionally renewed KE’s license for six months until January 20, 2024, with a condition against exclusivity.

Stakeholders have expressed opposition for granting the license solely to one company.

Nepra had initially granted a 20-year distribution license to K-Electric on July 21, 2003, which expired on July 20, 2023. In response to the regulatory authority’s earlier notice that sought comments from stakeholders, most of them including All-City Tajir Ittehad Association, Karachi Chamber of Commerce and Industries (KCCI), Association of Builders and Developers of Pakistan (ABAD) and various others opposed the grant of license to K-Electric.

ABAD highlighted the citizens’ suffering due to KE’s inefficiency and advocated for new and organized distribution companies to operate in the city.

Karachi Electric Supply Company Labour Union (CBA) expressed disappointment over KE’s unfulfilled commitments, citing unmet promises, non-improvement of the distribution network and retrenchment of employees.

Lasbela Industrial Estates Development Authority urged Nepra to consider removing territorial limits from KE’s license, emphasizing ongoing litigation.

Pakistan Civic Society, Wafaqi Mohtasib (Ombudsman), and individual industrialists also opposed the extension of KE’s license, while the Energy Department Balochistan, Petroleum Division and some industrialists supported the renewal.

The power regulator held a public hearing on the petition for the Karachi-based utility. Nepra Chairman Waseem Mukhtar headed the proceedings while the authority’s members including Mathar Niaz Rana (member Balochistan), Eng Maqsood Anwar Khan (KP), Amina Ahmed (Punjab), and Rafique Ahmad Shaikh (Sindh) were in the presence.

Nepra had framed several issues for the hearing, covering KE’s eligibility, performance, privatization goals, IT infrastructure, environmental impact, reliability, cybersecurity, workforce development, load demand management, energy demand, complaints resolution, renewable energy plans, power purchase arrangements, and electrification policies for housing colonies and industrial estates. During the hearing, KCCI representative Tanveer Barry said that there should be more than one power distribution entity for a metropolitan city of Karachi.

However, the K-Electric official responded the company wants to have the license for the next 20 years for its service territory including Karachi, Dhabeji and Gharo in Sindh and Balochistan’s Hub, Bela, and Vinder regions.

K-Electric informed about the outcomes of privatization, noting a capital expenditure of approximately Rs544 billion ($4.4 billion) aimed at enhancing power supply in Karachi. This investment resulted in the addition of 1,957 megawatts of generation capacity and a 12-percentage-point improvement in fleet efficiency from 30 percent in 2005 to 42 percent in 2023.

KE highlighted the commissioning of the most efficient 900 MW RLNG plant in the last quarter of FY 2023, which is expected to increase fleet efficiency to 49 percent for the entire year.

The company emphasized that the transmission and distribution system capacity was doubled and the line losses were halved since privatization.

During discussions on tariffs, participants focused on seeking benefits for industries in Karachi. Some expressed satisfaction with the network and services, while others proposed improved strategies. Responding to questions about service reliability, KE highlighted investments in IT and tech-based interventions to modernize infrastructure and enhance service delivery. Initiatives include the use of a Geographical Information System (GIS) and the deployment of 60,000 smart meters for better visibility over power consumption trends.

Aamir Ghaziani, KE’s CFO, affirmed the commitment to providing customers with quality services, citing an upcoming investment plan of Rs484 billion and the proposed addition of over 1,200 MW of renewable energy.