ISLAMABAD - NEPRA has said that transmission and distribution losses of the Discos have increased by 0.37 percent during last year and seven DISCOs (excluding LESCO, SEPCO and TESCO) booked a total loss of Rs. 207.3 billion during 2017-18.
NEPRA State of Industry Report 2018 further stated that the recovery ratio has also been deteriorated in eight out of ten Discos and the overall recovery ratio has seen a dip of more than four percentage points.
According to the report, the overall receivables of all the DISCOs have increased by Rs. 166.26 billion which are considerably higher than the receivables of Rs. 45.82 billion during FY 2016-17. As on June 30, 2018, the overall distribution sector receivables stood at Rs. 896.15 billion whereas, the receivables at the start of this financial year were Rs. 729.89 billion.
“Higher T&D losses and low recovery ratios have effectively eroded the revenue beyond acceptable levels and no real effort or improvement has been observed despite regulatory directions to DISCOs and advisories to the executive body,” said the report.
As a whole, DISCOs transmission and distribution losses have increased than 2016-17 and the largest increase in losses is observed in PESCO, whose losses increased by 5.5% in 2017-18 over, said NEPRA State of Industry Report 2018.
Although the average losses of the Discos increased during 2018 but some Discos such as Tesco, Gepco, Mepco, Hesco, Sepco and Qesco have decreased the losses. IESCO has shown an increase of 0.10 percent, LESCO 0.06 percent, while there is no change in the Fesco’s performance.
In T&D losses, Pesco is number one with 38.11 percent losses, followed by Sepco 36.67 percent, Hesco 29.88 percent, Qesco 22.44 percent, Mepco 16.59 percent, Lesco 13.83 percent, Tesco 12.46 percent, Fesco 10.57 percent, Gepco 10.01 percent and Iesco 9.13 percent.
The regulator has noted that as a whole, DISCOs’ transmission and distribution losses have increased than the last year. The largest increase in losses is observed in PESCO, whose losses increased by 5.5% in 2017-18 over those of 2016-17. DISCOs (LESCO, FESCO, MEPCO) with around 51% share in the power purchase either had increase in their losses or maintained same level of losses as in 2016-17.
In the FY 2016, DISCOs booked a loss of Rs. 130.2 billion, whereas the public sector GENCOs booked a loss of Rs. 7.55 billion. During FY 2017-18, seven DISCOs (excluding LESCO, SEPCO and TESCO) booked a total loss of Rs. 207.3 billion. These three DISCOs did not provide necessary data and reports.
Regarding the recoveries by Discos, Nepra report noted in the province of Khyber Pakhtunkhwa, PESCO has shown reduction of 0.69% in its recovery position as compared to previous year whereas TESCO’s recovery ratio has dropped by 16.29% as compared to the previous year.
Further, it may be seen that recovery ratios of IESCO, LESCO and MEPCO have deteriorated over the last year. Similarly, HESCO, SEPCO and QESCO have seen drastic reductions in their recovery ratios. GEPCO and FESCO have shown slight improvement; however due to negative performance of invariably all other DISCOs, the overall recovery ratio has seen a dip of more than four percentage points.
During FY 2017-18, receivables from the federal government have increased by Rs. 2.32 billion over those of FY 2016-17. The receivables of DISCOs from the provincial governments of Punjab, Sindh and Balochistan have increased in this financial year, whereas the receivables from Khyber Pakhtunkhwa have slightly decreased.
In addition, FATA receivables from domestic consumers have increased from Rs. 22.18 billion in FY 2016-17 to Rs. 26.85 billion in FY 2017-18. The receivables from KEL in FY 2017-18 have also increased by Rs. 18.33 billion.
Therefore, an overall governance issue is hurting DISCOs, where they are not able to recover their dues from the federal and provincial governments as well as private consumers. Since DISCOs are centrally controlled by the Ministry of Energy (Power Division), therefore overall responsibility lies with the federal government for taking necessary steps for improvement in this area.