ISLAMABAD            -         NEPRA has said that the distribution companies (Discos) failed to meet the objectives of power sector reforms and have caused Rs 213.5 billion loss to the national exchequer during due to transmission and distribution losses and less recoveries in FY2018-19.

Similarly, 295 fatal incidents occurred from July 2018 to December 2019, leading to causalities of employees of Discos/KE as well as public, said NEPRA’s performance report 2018-19, with comparison to 2014-15 through 2017-18, for the Discos and KE. 

All Discos have breached the NEPRA determined targets except GEPCO and FESCO and contributed a loss of around Rs. 38 billion to national exchequer. Whereas, the performances of SEPCO, HESCO, QESCO and PESCO remained worse in this regard in FY 2018-19 as their percentages pertaining to breach of NEPRA target are on higher side which leads to increase in circular debt.

SEPCO and PESCO topped the list of the Discos having more losses with having 37 percent and 36.6 percent losses respectively. Islamabad Electric Supply Company had the lowest losses with 8.86 percent losses but it was higher than the NEPRA allowed losses of 8.65 percent. The losses of FESCO and GEPCO were lesser than the NEPRA’s allowed losses, said the report. In financial terms, the losses incurred by PESCO were almost equal to one third of the losses incurred by all the other Discos and K-Electric. 

The report further said that DISCOs (QESCO, SEPCO and HESCO, PESCO and IESCO) failed to achieve full recoveries in FY2018-19. This has resulted in a huge loss to national exchequer i.e. Rs. 171.5 billion which is 200% more than the last year i.e. 2017-18. Overall weighted average of 89.26% recovery has been achieved by Discos against 100%. QESCO’s share seems very high i.e. more than Rs. 57 billion as it has performed very badly in FY2018- 19. It was surprisingly noted that after QESCO, IESCO is the second largest contributor in this huge revenue loss i.e. more than Rs. 20 billion. Further, it was observed that FESCO, PESCO, HESCO, SEPCO and K-Electric have also lost significant revenues i.e. more than Rs. 15 billion.

Regarding timeframe for the new connections, the report said the data submitted by DISCOs for the FY 2018-19 does not reflect ground realities as NEPRA team during visits of different DISCOs found that 100 to 200 connections per sub-division were pending since last six months. Whereas, the data shows that IESCO, PESCO and HESCO have provided almost 100% percent connections within the time frame as prescribed in PSDR 2005. Further, LESCO, QESCO and K-Electric have submitted that they have also provided more than 95% of applied connections in 2018-19.

On the other hand, the data pertaining to pending ripe connections from July-December, 2019 seems somehow realistic, but shows miserable figure i.e. 215,544. It is a known fact that power generation is available in abundance and capacity payments are being made for such huge capacity. Whereas in comparison of such ample generation, electricity demand has not been arising as per forecasted results and this has created a big gap between demand and supply which is increasing year by year. In such scenario, non-provision of new connections by the distribution companies actually shows their non seriousness towards the increase in revenues subsequently reduction in circular debt and ultimately betterment of power sector.

Although the duration of loadshedding has been decreased in FY 2018-19 as compared to previous years, but it can be eliminated if DISCOs avail 100% of their allocated quota of power. During the reported period, it came to the knowledge of NEPRA that DISCOs are carrying out load management as per AT&C losses criteria. But it is a matter of concern that criteria set by the DISCOs is not in line with the requirements of NEPRA Performance Standards. Therefore, DISCOs are required to submit their proposals regarding amendment in the said Rule of Performance Standards or revise their criteria as per NEPRA laws.

The report said that from July 2018 to December a total of 295 number of fatalities, both for employees and public, occurred. It has given a dreadful picture with respect to number of fatalities both for employees and public occurred (July 2018-June 2019) in all distribution companies i.e. 175 which is around 14% more than the last year 2017-18. The report also depicts a terrible figure of fatal accidents for the period from July to December, 2019 i.e. 120 and again K-Electric is major shareholder with a number of 52. Similarly, the number of fatal accidents occurred in PESCO and IESCO are also on higher side.

Individually, it was noted that K-Electric was the major contributor as 54 number of fatalities occurred in its service territory followed by IESCO with 29 number. If the figures of employees are looked then PESCO is the largest culprit where 16 employees were dead in a year followed by MEPCO with the number of 10. 18 fatal accidents in each distribution company in a year is very alarming. 

Performance of distribution companies throughout this period does not meet the objectives of power sector reforms. The Regulator observed that under the given scenario the existing set up would not be able to deliver, therefore, it is recommended that structural changes like independence of DISCOs with complete financial controls may be given due consideration to save the sector.