May 27, 2021 (MLN): Distribution companies (DISCOs) contributed a loss of around Rs 59 billion due to their inefficiency in transmission and distribution (T&D) losses and Rs 160 billion in the recovery of electricity bills during FY2019-20, a report by NEPRA said.
This total loss of around Rs 160 billion was borne by the National Exchequer in FY 2019-20 which is very alarming and one of the main reasons for the continuous growing circular debt in Pakistan.
The National Electric Power Regulatory Authority (NEPRA) lately released the ‘Performance Evaluation Report’ of distribution companies (DISCOs), in light of the Performance Standards (Distribution) Rules (PSDR) 2005.
The report provides the analysis of data for the FY 2019-20 along with a comparison of the last four years i.e., 2015-16, 2016-17,2017-18 and 2018-19. It is noted with concern that in FY 2019-20, no noticeable improvement in the performance of distribution companies has been observed. Similarly, the issue of data authenticity still remains there.
It has been noted with serious concern that DISCOs could not take such measures to bring improvement in the critical area i.e., transmission and distribution (T&D) losses and recovery.
The regulator highlighted that the reported figures of T&D losses indicate that except GEPCO and FESCO, none of the DISCO could meet the regulator’s expectations. Particularly, QESCO, PESCO, SEPCO and HESCO have shown the worst performance among all DISCOs in this regard.
As far as recovery is concerned, the report noted that none of the DISCO has achieved the milestone of 100% recovery. In FY 2019-20, LESCO has shown the highest recovery followed by GEPCO, MEPCO, FESCO, K-Electric and IESCO by showing their recoveries as 94.60%, 94.36%, 94.21%, 94.18%, 92.14% and 90.30%. Further, QESCO has touched the number of 80% because of getting subsidy amount. However, SEPCO and HESCO performed poorly by containing figures of 56.60% and 70.10% respectively. The overall weighted average of 90.98%recovery has been achieved by DISCOs against 100%.
The report also posed a serious concern over the power demand as that power demand is not being generated despite the availability of ample generation in the country and the non-provision of new connections to the eligible consumers within the prescribed time frame is one of the factors contributing to this less power demand.
The report underlined that GEPCO, FESCO, QESCO and SEPCO remained unsuccessful to provide more than 95% of the applied connections within the time frame as prescribed in PSDR 2005.
NEPRA has serious reservations over the authenticity of data regarding load shedding being carried out by DISCOs in their service territories. Although the duration of load shedding has been decreased in FY 2019-20 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. However, the report by NEPRA showed a matter of concern that criteria set by the DISCOs are not in line with the requirements of Performance Standards.
The figures reported by the DISCOs except QESCO and HESCO represent that they carried out load shedding for an average of 2 to 3 hours on daily basis, whereas QESCO and HESCO have reported 6.0 and 5.67 hours. Overall, this indicates that the duration of load shedding in the country significantly decreased due to ample power generation.
Keeping in view the requirements of Performance Standards, distribution companies are advised to follow the order of load shedding according to different categories of consumers as provided in PSDR 2005. The distribution companies are also directed to submit their proposals regarding the gradual decrease in AT&C losses in order to avoid load shedding.
Being a regulatory authority, NEPRA vigilantly observes the interest of consumers. In this connection, NEPRA regularly monitors the complaint handling mechanism of distribution companies and issue directions to resolve consumer complaints timely. During the visits, the team of NEPRA found complaint centers in poor and deteriorated conditions, the report further added.
In addition, the report also raised its concern over the data submitted by DISCOs which shows that SEPCO did not receive any single complaint in a day in any of its complaint centers. Similarly, PESCO, QESCO, FESCO, MEPCO and HESCO also received only 2 to 3 complaints per day in each of their complaint centers during FY2019-20.
On the safety front, the report noted that the number of fatal accidents in 2019-20 has been decreased as compared to 2018-19 from 175 to 160. But 160 itself an alarming and indicates that distribution companies have failed to adhere to the safety practices and K-Electric is on top in this regard followed by IESCO and PESCO.
Resultantly, NEPRA Authority took serious notice and decided to conduct investigations under Section 27A of the NEPRA Act. Accordingly, investigations against K-Electric, PESCO, HESCO, SEPCO and FESCO have been conducted, whereas, remaining DISCOs are also in the plan, it added.
With regards to fault rate, a Key Performance Indicator- the number of faults that occurred in the one-kilometer length of line, PESCO remained an efficient company in FY 2019-20 followed by HESCO and QESCO as they reported their fault rate less than 1 and equal to 1.
Further, the ratio of faults per kilometer for FESCO, SEPCO and K-Electric ranges from 1 to 2. Whereas MEPCO is worst in this regard as an average number of 60 faults were occurred in the one-kilometer length of its distribution system, the report further stated.
This all leads to uncertainty of the data as on the other hand their data related to unplanned power supply interruptions is on the higher side. The aforementioned data can also be hard to believe as most of the time NEPRA team during their visits to different DISCOs found the system in deteriorated condition, the report added.
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