Farhat Ali

The recently published report titled “Performance evaluation report of public sector GENCOs FY14-16” by the power regulator Nepra presents a dismal performance of Gencos. Facts and figures speak for themselves and so do the figures presented by Nepra.

Nepra has revealed that public-sector power generation companies (Gencos) have lost more than 15 billion units of electricity in the last two years, meaning a revenue loss of Rs 150 billion to the exchequer. The losses are beyond the allowed limit of around 670 million units.

Nepra has concluded that the poor state of affairs at Gencos is a cumulation of depleted output from the operative power plants while many of the gas and heavy fuel-based power plants have been on standby mode for the last two years, equipment deterioration, lack of maintenance and insufficient technical expertise.

What Nepra has ignored to report is across the board poor governance in the power sector, intervention of the vested interests and political considerations in the operation of entities, cronyism and nepotism as against professionalism.

Two federal entities are primarily responsible for this pathetic state of affairs. The prime responsibility lies with the Ministry of Water & Power (MoWP) for its poor governance. The secondary responsibility lies with the Privatisation Commission of Pakistan which started the process of privatization of power generation and distribution companies but aborted the programme half way on account of vote politics, wasting public money in the process.

The problem of underperforming power generation plants in the public sector and wasteful standby generation capacity has been a matter of serious concern since 2008.

Sick power plants could have been easily restored to their full-rated capacity through the injection of new technology at around 1/4th of the cost of the new power plant and, above all, the additional capacity so restored could have been added to the grid much earlier providing relief to consumers from load shedding at affordable tariffs.

While the PPP government went for rental power which ended in a fiasco, the incumbent government opted to go for LNG- and coal-based power plants.

Nandipur power plant inherited by the incumbent government also ended in a fiasco.

According to Nepra, the worst performing power station is the Lakhra Power Station which shows only a 25 percent availability. Much of the degeneration is a product of underuse. Some plants, such as the TPS Guddu, remained on an unplanned outage mode throughout the year.

Nepra’s report highlights how the malaise within power generation is fundamental to the power crisis in the country.

The findings of the Nepra report establish that during FY14-16, all Gencos consumed excess auxiliary power over the allowed limit with an energy loss of around 668M.KWh during service mode. Almost half of the 668M.KWh loss was due to TPS Muzaffargarh (Genco-III)!

In addition, the availability factors (AF) for various Gencos were below the guaranteed availability. For example, Nandipur power plant remained around 71 percent in 2015-16 against the guaranteed availability of 82 percent while Guddu 747’s AF remained around 65 percent against the guaranteed availability of 80 percent. Lakhra Power Station (Genco-IV) was the worst with an AF of 26 percent in 2014-15. The Public Accounts Committee (PAC) was informed in a meeting on Wednesday that the country sustained a Rs 213 billion line loss annually and Peshawar Electric Supply Company (Pesco) is on the top of line losses list which are up to 32.6 percent. Public Accounts Committee (PAC) also sought the report from the Ministry of Energy (Power Division) over the line losses and power theft in winter and summer upon which the Ministry of Energy (Power Division) gave a briefing to the committee on the line losses and the electricity theft.

PAC also took note of the crises and was told that there were 26.2 million electricity consumers, out of which, 86 percent domestic consumers who consume 50 percent of the total electricity generated in the company while 11 percent are commercial users who consume 7.5 percent and 1.3 percent are industrial consumers who consume 24 percent of the electricity.

Pepco officials told PAC that the country sustained line losses of Rs 213 billion and Pesco is on the top of list in the category of lines losses which are around 32.6 percent while losses due to power theft are at 11.65 percent, Sesco line losses are 31.9 percent while its power theft losses at 18.57 percent, the Hyderabad Electric Supply Company (Hesco) losses are at 30.6 percent and its power theft losses at 12.14 percent, Quetta Electric Supply Company (Qesco) line losses at 23.1 percent and its power theft losses at 1.8 percent and Lahore Electricity Supply Company (Lesco)’s line losses at 13.8 percent (1.1 percent transmission losses and 12 percent transmission and technical line losses).

The Pepco officials told the committee that Pesco sustained line losses of Rs48 billion, Multan Electric Power Company’s (Mepco) Rs 30 billion, Lahore Electricity Supply Company’s (Lesco) Rs 34 billion, Hesco’s Rs 19.69 billion while Sepco’s line losses of Rs 20.41 billion.

PAC sought a detailed report from the electricity distribution companies with regard to power theft by domestic consumers and also directed to replace the 66KV lines with 220KV and grid stations with 500KV. If this directive is aimed at arresting power theft then even an 11KV line can deter thieves from stealing power.

PAC has been repeatedly hearing these issues for many years. One wonders if these hearings produce any solution.

The restructuring in the power sector, if any, is halfhearted and often meaningless.

Giving details on net-metering, the Pepco MD told the committee that people do not have awareness about net-metering due to which this scheme has not achieved the targets and now the government decided to revise the whole framework. This argument appears far from truth as net-metering has not been put in place and consumers are not aware of it.

The Pepco MD also told the committee that it is now decided that only the qualified vendors of the Alternate Energy Development Board will install net-metering and SDOs have been appointed in distribution companies with regard to net-metering.

He told the committee that under the new framework, the time period of 30 days has been given for the net-metering system and online tacking is made of all the applications submitted for net-metering.

The Pepco MD told the committee that the Asian Development Board has approved a loan of Rs01 billion and these meters were planned to be installed in a 10-year period, but these were installed for one-third employees so this project has disbanded and now the government was planning to AMI system through private sector.

All of this innovation may sound good but in an entity infected with malice the outcome is not expected to be promising.

What is needed is full-fledged restructuring of the companies under professional hands devoid of political influence or a full-fledged sell-off process.

(The writer is former president of Overseas Investors Chamber of Commerce and Industry)