K-Electric management grilled at the NEPRA hearing in Karachi

KARACHI: Consumers of K-Electric Limited (KE) including the business community vehemently opposed KE’s exclusive rights to sale and distribute electricity in Karachi.

Chairman Businessmen Group (BMG) Siraj Kassim Teli opposed the exclusivity of K-Electric in its service area and urged the authority to open the market for other players, which would create a competitive market and improvement in service. “Private sector should be allowed to conduct business of distribution and sale of electric power to consumers in Karachi. Exclusivity granted to a single company to undertake sale and distribution of electric power is tantamount to creation of monopoly on a vital source of energy.”

To a question by Chairman NEPRA whether the business community was ready to enter the electricity sale and distribution market, Teli said they had already deliberated on this issue adding many local foreign parties would be interested to venture in, once the market was opened.

Opposing the exclusivity, Sohail Tabba of Yunus Brothers Group (YBG) said KE had no competition and their balance sheet was good, which was why the power utility was least interested in improving the service. “Private businesses are already in generation business, and they would definitely come into electricity sale and distribution if provided the opportunity.”

A representative of SITE Association of Trade and Industry called for unbundling of generation, transmission and distribution business of K-Electric.

Sources said the taxation system of KE was not transparent and urged Federal Board of Revenue (FBR) to conduct an audit of the taxes which KE collects from consumers and deposits in the national exchequer.

Countering the claims of KE regarding 75 percent of the feeders being load-shedding exempt, Ameer Jamat-e-Islami Karachi Hafiz Naeem-ur-Rehman said KE was undertaking load-shedding on pretext or the other. “Power outages go on in summer due to higher temperature, in spring due to high humidity and in winters due to low gas pressure.

Hafiz said KE was not running its oil based plants to save costs while people were suffering. He also talked about the conduct of KE staff at the complaint centers.

On the directives of Supreme Court of Pakistan NEPRA is to holding public hearings on the matter of Authority Proposed Modification (APM) in the distribution license of KE to ascertain whether exclusive service rights to KE are in the public interest or not. KE is contesting to maintain its exclusivity in the service area. It may be mentioned here that KE’s distribution license is valid till 2023.

“KE has invested around Rs335 billion since 2005, and the generation capacity had been increased by 1,057MW to 3,202MW presently, while transmission and distribution network had also been improved,” KE’s CFO said.

The improvements in generation fleet reliability and availability, including efficiency improvements were passed on to consumers along with significant improvements at consumer level which includes reduction in load-shed, with over 75 percent of the feeders being load-shedding exempt.

“KE has been reinvesting its profits since 2012, and it’s performance is far better than other distribution companies in the country,” Muhammad Aamir said.

Chairman NEPRA Tauseef Farooqui said the representations received by the authority from KE’s consumers projected otherwise. “If your service has improved then why the number of complaints has increased,” Farooqui said.

“Despite having exclusivity for the last 15 years KE had not been able to overcome the power outages, which ranged from three hours/day to nine hours/day. “There are still very high-losses areas, high-losses areas and medium-losses areas in your territory. How would you solve the problems in the next three years,” Farooqui asked.

The KE officials had no answer to the question asked by Chairman NEPRA whether KE had introduced pre-paid meters, or was planning to do so.

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