MONDAY FEBRUARY 16: T&D losses: Discos fail to comply with Nepra directives

ISLAMABAD: Power distribution companies (Discos) have failed to comply with numerous directives of National Electric Power Regulatory Authority (Nepra) to undertake a study to determine the exact quantum of transmission and distribution losses, it was learnt.
"Discos have not been complying with the directives of Nepra" - the regulator lamented in a letter in response to Ministry of Water and Power's proposal for issuance of policy guidelines to rationalise T&D losses for 2013-14. Sources told Business Recorder that Nepra regretted that a number of directives had been issued repeatedly to Discos for carrying out an industry-wise study on T&D losses but most of the Discos failed to comply with the directives. They added that Nepra's objective was to make a fair assessment of T&D losses for tariff determination.
Sources further stated that subsequent to the continuous default on compliance, the Authority decided to conduct an in-house study on T&D losses for Discos. The transmission and distribution losses for the fiscal year 2013-13 have been based on the findings of this in-house study; and the law and order factor prevailing in some Discos was considered in allowing losses in tariff. According to sources, "the Nepra maintained that while assessing the consumers-end tariff of Discos, all the relevant costs, ie, generation, transmission and distribution for supply of electricity to ultimate users were considered to allow `prudently incurred' cost". Ministry of Water and Power has reportedly requested the Economic Co-ordination Committee (ECC) of the Cabinet for issuance of policy guidelines with respect to the 2014-15 tariff determination. The Ministry stated that Nepra is in the process of finalising the tariff for fiscal year 2014-15 and if the regulator does not consider the losses existing in each Disco yet again this will certainly contribute to the rise of circular debt.
Water and Power Ministry maintained that Discos are being pushed to complete their study of technical losses to assess the exact quantum of losses. The ECC had approved policy guidelines for Nepra to rationalise the T&D losses for 2014-15. Sources said the Authority has also been urging Discos to enter into an agreement with Central Power Purchasing Authority (CPPA) after it learnt that there exists no Energy Supply Agreement (ESA) between CPPA and Discos. The Authority directed all the Discos to enter into a contract with CPPA for the supply of energy.