Inefficiencies in electricity transmission and distribution sector cause loss of Rs123 billion: NEPRA

KARACHI: The National Electric Power Regulatory Authority (NEPRA) has noted with concern that during FY2017-18, distribution companies (DISCOs) contributed the loss of more than Rs45 billion on account of transmission and distribution (T&D losses), whereas, they failed to make recovery of Rs78 billion against bills charged. K-Electric has incurred highest loss.

“Examination of T&D losses has revealed that none of the DISCO except Islamabad Electric Supply Company (IESCO) could meet Regulator’s expectations,” NEPRA noted in Performance Evaluation Report issued on Monday.

The difference in the generated energy and distributed energy is known as Transmission & Distribution (T&D) loss. Power System losses can be divided into two categories i.e. technical & non-technical/administrative losses. Technical losses are naturally occurring losses, whereas, non-technical/administrative losses are caused by the actions external to the power system.

The main reasons of technical losses are lengthy distribution lines, inadequate size of conductors and installation of distribution transformers away from load centers, etc. due to which these companies have failed to achieve the targets.

“Reduction of these losses is very critical for sound financial health of distribution companies,” it said.

Authority noted that no remarkable improvement in the performance of distribution companies has been observed. The fact remains that they have some inherent problems such as geographical issues, dilapidated distribution system, law and order situation, and political factors etc., which are the causes of their unsatisfactory performance.

Similarly, the issue of data authenticity is still a major concern of NEPRA as reported in previous performance evaluation reports, and therefore, NEPRA has already initiated strict actions in form of imposing penalties against such incorrect reporting by the distribution companies.

In the field of recovery of bills, Multan Electric Power Company (MEPCO) and IESCO have shown better performance, whereas, Quetta Electric Supply Company (QESCO) with a recovery of 46.1 percent stood lowest among all the DISCOs during FY 2017-18.

NEPRA has serious reservations over the authenticity of data regarding load shedding being carried out by distribution companies in their service territories. “It is a matter of concern that distribution companies are not following the order of load shedding according to different categories of consumers as provided in PSDR 2005. This becomes worst, when consumers who were affected due to technical faults/breakdowns have also to bear forced load shedding. Therefore, efforts should be made to compensate such consumers,” the report noted.

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