Nepra flags Qesco performance, Rs139bn losses

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has raised serious concern over the financial and operational inefficiencies of the Quetta Electric Supply Company (Qesco), citing its inability to meet key transmission and distribution loss targets.

During a public hearing on Tuesday, Nepra officials disclosed that Qesco’s transmission and distribution losses surged to 29.77 per cent far exceeding the mandated target of 14.04%. These inefficiencies resulted in financial losses amounting to Rs36.7 billion. Furthermore, the company’s recovery ratio plummeted to an alarming 32% in the fiscal year 2024, contributing to a cumulative loss of Rs102.99 billion.

The hearing, chaired by Nepra’s chairman, centered on Qesco’s proposed five-year investment plan worth Rs80 billion for the fiscal years 2025–2029. The plan details funding strategies, including 47% from Qesco’s internal resources, 24% from federal and provincial contributions, 23% from loans, and 6% from consumer funds. Nepra expressed skepticism regarding Qesco’s capacity to implement the investment plan effectively, given its poor track record. Despite utilising nearly all of its previous investments, the company’s financial performance has significantly deteriorated, the regulator said.

The hearing also brought systemic issues in Qesco’s operations into focus, with agricultural consumers—who account for 70% of its electricity consumption—relying heavily on government subsidies. These consumers currently receive four to 8 hours of electricity for tube wells.

NEPRA stressed the importance of integrating solarisation efforts into Qesco’s load forecasting to reduce dependence on grid electricity.

Delays in critical transmission grid projects also drew Nepra’s ire, with officials warning that such setbacks increase costs for consumers.

“Qesco’s heavy reliance on government subsidies and loans is unsustainable. If these supports are withdrawn, what alternative strategies are in place?” a Nepra official questioned.

NEPRA urged Qesco to devise a comprehensive plan to reduce losses, improve recovery rates, and enhance operational efficiency. Without a clear strategy and committed action, Nepra warned, Qesco risks further financial instability. The regulator emphasised that Qesco’s inefficiencies reflect broader challenges in the energy sector, where distribution companies struggle with reliability and supply issues.

NEPRA called for immediate corrective measures to address the financial and operational risks posed by Qesco’s underperformance.