National Electric Power Regulatory Authority (Nepra) said on Friday that power Distribution Companies (Discos) have not converted into commercially viable independent business entities as they continue to be plagued by financial mismanagement.
Addressing the opening of the fifth day (final day) of Nepra Energy Week 2020, Nepra Member (Sindh) Rafquue Ahmad Shaikh said that the reform process envisaged corporatization of Discos and ultimate privatisation. However, 20 years down the line, corporatization of Discos has not worked fully.
He maintained that despite having their respective Board of Directors, Discos are still centrally tied in terms of decision making and their desired independence is virtually non existent. Consequently, the envisaged efficiency gains from unbundling are scant.
“Problems like high distribution losses, low recovery, distribution system constraints, inefficient service provision, low outreach to the new clusters of consumers, lackluster expansion of networks and financial mismanagement still plague the distribution sector,” he added.
The regulator argued that distribution sector was the last step in the supply chain of electricity and given its terminal nature, the overall financial health of the power sector greatly depends on efficient distribution.
The distribution session was attended by representatives of various power utilities and organizations/institutions such as Discos, World Bank State Bank of Pakistan (SBP), FPCCI, APTMA, CPPA-G, PPIB, NTDC, Wafaqi Mohtasib, and AEDB etc. Moreover, power sector researchers and academia i.e. NUST, LUMS etc. also shared their ideas to achieve the goal of sustainable development through effectiveness and optimization of the distribution sector.
The distribution session focused on the role of Discos, introduction of competition through supplier regime and CTBCM, wheeling and net metering arrangements, reasons and way forward to eliminate circular debt etc. Guest speakers highlighted the impact of higher consumer end tariffs on the economy particularly on the export sector and suggested the way forward to overcome these challenges.
The distribution session also concluded with the resolve to ensure provision of affordable electricity to the consumers, eliminating inefficiencies in the system, introduction of competition through supplier regime, CTBCM and wheeling & net metering arrangements.
The distribution session as well as the Energy Week concluded with the closing remarks of Chairman Nepra Tauseef H Farooqi who thanked Nepra Management Committee and the lead team for organizing a fruitful event which will ultimately result in revamping the power sector of Pakistan. Furthermore, he appreciated the innovative ideas, valuable recommendations, and latest approaches shared by national and international energy experts and hoped to chalk-out actionable ones.
