ISLAMABAD   -   National exchequer suffered a loss of more than Rs. 45 billion in 2017-18 due to the inefficiency of power distribution companies (Discos). It is noted with concern that during the period under report, DISCOs contributed the loss of more than Rs. 45 billion on account of T&D losses, whereas, they failed to make recovery of Rs. 78 billion against bills charged, noted NEPRA in the Performance Evaluation Report of Distribution Companies (2017-18). Under Performance Standards Distribution Rules (PSDR) 2005, each distribution company is required to submit to NEPRA an Annual Performance Report (APR) in a prescribed format. The APRs for the FY 2017-18, submitted by the distribution licensees, were reviewed on the basis of parameters namely, transmission and distribution (T&D) losses, recovery, system average interruption frequency index (SAIFI), system average interruption duration index (SAIDI), time frame for new connections, loadshedding, nominal voltage, consumer complaints, safety, and fault rate.

NEPRA, in its Performance Evaluation Report (PER), said that taking a holistic view of DISCO’s performance, it is noted that no remarkable improvement in the performance of distribution companies particularly PESCO, SEPCO, HESCO and QESCO has been observed. Talking about the doubtful data NEPRA said that the issue of data authenticity is still a major concern of NEPRA as reported in previous Performance Evaluation Reports (PERs), and therefore, NEPRA has already initiated strict actions in form of imposing penalties against such incorrect reporting by the distribution companies.

Regarding loadshedding in 2017-18, the report said that DISCOs except GEPCO & QESCO reported the figures of loadshedding in the range of 1.26 to 3.25 hours which is contrary to the ground realities. For instance, FESCO has submitted only 0.74 hours loadshedding in its territory in 2017-18 on daily basis. Similarly, KE has reported that it carried out averagely 1.26 hours loadshedding on daily basis, which is not a factual position. NEPRA team, during visit of different distribution companies observed loadshedding of 8 to 10 hours in urban and 10 to 12 hours in rural areas on certain feeders. In addition to above, it has also been observed that distribution companies are not following the order of loadshedding according to different categories of consumers as provided in PSDR 2005. In terms of reduction in average daily loadshedding hours, in comparison to 2016-17, FESCO, LESCO, MECPO, K-Electric and HESCO have shown marked improvement whereas GEPCO remained the worst among all with 11 hours of daily loadshedding, followed by QESCO and PESCO with 5.8 and 3.25 hours average daily load-shed.

Regarding T&D losses it was observed by the report that most of the DISCOs have made gradual improvement except PESCO, FESCO and HESCO. Particularly, if the values of losses in 2017-18 are compared with the values of 2016-17, it has been observed that all have shown improvement except IESCO and PESCO. While most of the DISCOs have made improvement, KE continued to take the lead among all reducing it from 25.30% in 2013-14 to 20.4% in 2017-18.

Regarding T&D losses & recovery, the report noted with concern that during the period under report, DISCOs contributed the loss of more than Rs. 45 billion on account of T&D losses, whereas, they failed to make recovery of Rs. 78 billion against bills charged. Examination of T&D losses has revealed that none of the DISCOS except IESCO could meet regulator’s expectations. It is relevant to state here that the T&D losses of PESCO were 38.1% against 27.62% as allowed by NEPRA. In the field of recovery of bills, MEPCO & IESCO have shown better performance, whereas, QESCO with a recovery of 46.1% stood lowest among all the DISCOs during FY 2017-18.

MEPCO has shown highest recovery followed by IESCO among all other DISCOs and almost has touched the target of 100%. Further, GEPCO, FESCO and LESCO have also shown good performance in this regard and achieved more than 97% recoveries. Rest of the DISCOs, however are lagging behind the target of 100% which will definitely impact their services to the consumers. Particularly, HESCO & SEPCO have performed poorly. QESCO’s performance is exceptionally bad in terms of recovery rates in 2017-18 which stands at 46.1%. KE achieved 91.04 percent target. On the financial impact of breach of recovery targets, the report said that the loss of revenue which was not recovered by the DISCOs and KE due to their poor management. The loss to the national exchequer accumulates to more than 78 billion rupees. It is also observed that MEPCO & IESCO have incurred very small loss as compared to other DISCOs under this head during the year 2017-18. Whereas, K-Electric has incurred highest loss.

Recovery rates of QESCO, IESCO, GEPCO, FESCO, LESCO, MEPCO have gone down whereas PESCO, SEPCO, HESCO and K-Electric have shown marked improvement during the last 3 years. The report suggests that by applying good governance and management techniques, DISCOs can further improve their recovery rates. Regarding System Average Interruption Frequency Index (SAIFI) and System Average Interruption Duration Index (SAIDI), the report said that SEPCO’s performance in this indicator remained worst of all with a reported number of 568, followed by MEPCO and HESCO with 316 and 180 respectively. On the other hand, PESCO, LESCO, K-Electric and QESCO showed marked improvement. The regulator noted with concern huge variations in SAIDI numbers and maintained that reliable power can be supplied to the end users by improving SAIFI & SAIDI by carrying out regular maintenance of distribution system.

On new connection, the NEPRA report said that in comparison to 2016-17, PESCO, FESCO, LESCO QESCO and K-Electric have shown improvement in provision of new power connections during 2017-18. Whereas, IESCO has shown zero pendency of new connections same as in last year, which is far away from ground realities. NEPRA team during visit of different distribution companies noted with serious concern the number of pending applications. IESCO, PESCO, QESCO, SEPCO, HESCO and K-Electric have provided more than 95% connections to eligible consumers in 2017-18. However, GEPCO’s performance is worst in this regard followed by FESCO. Further, slight breach of targets has also been made by LESCO & MEPCO.

It is pertinent to highlight that the data submitted by companies particularly those who have claimed 100% achievement of target of applied connections seems not based on ground realities as NEPRA team physically verified such data during the year 2016-17.

On the issue of consumer service complaints, the report said that the number of complaints received by DISCOs over the period of last five years through different modes indicates a mixed trend with LESCO, QESCO, SEPCO, KE and HESCO receiving a greater number of complaints in 2017-18 as compared to 2016-17. The data provided by the distribution companies shows that except GEPCO, LESCO and K-Electric, all other DISCOs have not received even 2 complaints on average per complaint center per day. This is not rationalized as the same was verified by NEPRA team during visits of different DISCOs.

On the safety issue, NEPRA report said that it was observed that a total of one hundred and fifty two (152) fatalities occurred in all distribution companies in 2017-18. The breakup of data reveals that 72 of these were employees and 80 were general public.

GEPCO reported the highest fatal accidents of 29 in 2017-18 followed by LESCO, IESCO, MEPCO, SEPCO and HESCO with 21, 20, 17, 17 and 15. NEPRA noted with serious concern that these DISCOs have failed to adhere the safety procedures and develop a safety culture. DISCOs are required to prioritize safety as of losses and recovery.