ISLAMABAD: The poor performance of electricity distribution companies in the fiscal year 2023-24 led to losses exceeding Rs660 billion for the national exchequer, according to the annual performance report by the National Electric Power Regulatory Authority (NEPRA).
The report highlighted systemic inefficiencies, including high transmission and distribution (T&D) losses and low recovery rates. These inefficiencies, coupled with the operational shortcomings of both private and public power plants, imposed significant financial burdens on taxpayers and consumers.
T&D Losses and Circular Debt
T&D losses emerged as a critical issue, with no distribution company meeting the NEPRA-set target of 12.15%. Instead, actual losses rose to 18.08%, up from 16.38% in FY23. These losses alone accounted for an estimated Rs281 billion drain on the exchequer, with major contributions from PESCO (Rs96bn), LESCO (Rs47.5bn), QESCO (Rs37bn), and SEPCO (Rs28.7bn).
Faisalabad, Islamabad, and Karachi-based companies missed T&D loss targets marginally, while Peshawar, Sukkur, Quetta, and Hyderabad-based firms recorded far higher deviations, ranging from 9.6% to 18.4%.
Billing and Recovery Rates
Despite a crucial need to enhance revenue collection, no Disco achieved the 100% recovery target. Punjab-based companies, including IESCO and LESCO, approached recovery rates of 96%-97%, while Hyderabad, Quetta, and Sukkur performed abysmally with recovery rates of 76.4%, 65.41%, and a staggering 31.79%, respectively. The overall recovery rate of 92.18% contributed to losses exceeding Rs380 billion.
Service Standards and Safety
All companies, including K-Electric, failed to meet targets for power interruption frequency and duration, with underperformance also noted in new connection provisioning. Safety in the sector remained alarming, with 140 fatalities reported, including 34 employees and 106 civilians. K-Electric reported the highest fatalities, attributing many incidents to consumer negligence or accidents on private property.
Call for Urgent Reforms
NEPRA emphasized the urgency of corrective measures to address rising circular debt, improve recovery rates, and reduce inefficiencies to prevent further financial strain on the power sector. While nuclear power plants exhibited high standards, the overall performance of distribution companies underscored systemic challenges requiring immediate attention.
Story by Khaleeq Kiani
