Power distribution companies incur Rs110bln in T&D, recovery losses

KARACHI: Power distribution companies, including K-Electric, have incurred more than Rs110 billion in cumulative losses on supply wastage and non-payment of bills in the fiscal year of 2016/17, the regulator said on Wednesday.

The National Electric Power Regulatory Authority (Nepra) said the distribution companies showed up losses of around Rs35 billion due to inefficiency in transmission and distribution (T&D) and Rs76 billion on account of less recovery of bills.

“The reported figures of T&D losses indicate that except Iesco (Islamabad Electric Supply Company), none of the disco (distribution company) could meet the regulator’s expectations,” the Nepra said in its performance evaluation report 2016/17.

“Particularly, Sepco (Sukkur Electric Power Company) has shown the worst performance among all the discos.”

Notwithstanding, Sepco has improved its recovery to 110.8 percent in 2016-17 from 55.2 percent in 2015/16. Iesco and Lahore Electric Supply Company (Lesco) achieved 100 percent recovery targets. The recovery by Quetta Electric Supply Company (Qesco) declined to 43.5 percent from 71.6 percent.

The losses comprise of both technical and non-technical losses. Technical losses are naturally-occurring losses due to power dissipation in distribution system, Nepra said. Main reasons of technical losses are lengthy distribution lines, inadequate size of conductors and installation of distribution transformers away from load centres. Non-technical losses are mainly due to power theft and non-payment by consumers.

“T&D losses have serious financial implications for the respective discos as well as the whole power industry,” the regulator said.

Nepra said the fiscal year under review did not witness any major improvement in the performance of distribution companies and K-Electric.

Similarly, the issue of data correctness as reported in the previous performance evaluation reports remained unchanged. Nepra has initiated actions against fake reporting by the distribution companies and is trying to bring them within the frame of compliance of performance standards based on facts.

“During FY 2016/17, Nepra continued monitoring activities including data verification and found that the data submitted by the distribution companies is significantly fudged,” the regulator said.

Nepra took actions and legal proceedings were initiated against all distribution companies except Multan Electric Power Company (Mepco) and Qesco. The regulator penalised Lahore, Gujranwala, Hyderabad, Sukkur and Faisalabad power distribution companies and proceedings against Iesco and K-Electric are still going on.

Nepra considered four parameters for the performance ranking of discos and K-Electric: T&D Losses, recovery, time frame for new connections and safety due to the issue of data accuracy.

Performance ranking is carried out based on the data submitted by the discos and K-Electric and marks are awarded by considering the compliance level in respect of standards and Nepra’s targets. Iesco maintained its first position. Gepco and Lesco have acquired the same marks, but both have been segregated on the basis of number of fatal accidents and awarded 2nd and 3rd position, respectively.

Mepco’s ranking fell to fourth position due to decline in losses and recovery. K-Electric improved to fifth position in 2016/17 because of improvement in losses and recovery.