National Electric Power Regulatory Authority (Nepra) in its State of Industry report 2016, a part of which appeared in Business Recorder a few months ago, claims that in spite of persistent directives and monitoring by the regulator, performance of public sector generation, transmission and distribution companies remained unsatisfactory as their efficiency levels either did not show any improvement or went down further relative to previously reported results.
It also states that capacity issues, lack of financial support due to centralized control, procedural delays and setting of wrong priorities are the major factors which have resulted in continued below par performance. Unless these issues are addressed, the performance of power sector would continue to remain at unacceptable levels. According to the report, only Tribal Areas Electric Supply Company (Tesco) and Islamabad Electric Supply Company (Iesco) were able to achieve Nepra's set loss levels, whereas all other Discos and K-Electric failed to meet Nepra's set targets. In terms of overall average losses of 15.23%, allowed to Discos, actual average losses have been reported by DISCOs as 17.95%, showing a gap of 2.72%.
The report says, Pesco's actual losses were 33.76, against allowed losses of 26 per cent, Tesco, 20 per cent against target of 20 per cent, Iesco, 9.09 per cent against 9.39 per cent, Gepco 10.58 per cent against allowed losses of 9.98 per cent, Lesco 13.94 per cent against allowed losses of 11.75 per cent, Fesco 10.24 per cent against allowed losses of 9.50 per cent, Mepco's actual losses were 16.45 per cent against allowed losses of 15 per cent, Hesco 26.46 per cent against allowed losses of 20.50 per cent, Sepco 37.92 per cent against allowed losses of 27.50 per cent, Qesco 23.92 per cent against 17.50 per cent. KE's average losses were 25.66 per cent against allowed losses of 15.23 per cent. This implies that Discos had incurred losses of 16, 765 GWh in 2015-16 whereas KE lost 4,440 GWh.
The report further said that since 2011-12 all the Discos have shown very little improvement, if any. For instance IESCO, GEPCO, FESCO which are considered among the good DISCOs have shown very little improvement from that of 2011-12. Pesco, Qesco, Sepco and Hesco are among those whose losses are known to be very high showed negligible improvement over the five year period. The matter of real concern is the performance of Lesco and Mepco in this area. Mepco in 2011-12 reported losses of 19.32% which were reduced to 15.5% in 2014-15, whereas in 2015-16 its reported losses rose to 16.45%. Similarly Lesco's losses have also risen.
Discussing recovery trend Nepra's report states that Iescos's recovery declined in 2015-16 when compared with previous years. Gepco, Fesco, Mepco and Lesco have shown improvement in their recovery efforts. Qesco has also shown an appreciable increase in recovery ratio from 32.56% in 2014-15 to 71.63% in 2015- 16. On the other hand Sepco, and Hesco have shown a negative performance.
The record of K-EL is a mixed one. In 2011-12, K-Electric had a recovery ratio of more than 90%, which declined to 88.65% in 2012-13, registered 87.06% in 2013-14, improved to 90.37% in 2014-15, however in 2015-16 it declined to 87.64% from reported number of 13.51% in 2011-12 to 13.94% in 2015-16.
Nepra which closely monitors the power sector in accordance with its mandate, said in the report that under-utilization of power plants has been noted, resulting in low annual utilization factors; power plants were either underutilized or deliberately not operated, while load shedding was being carried out. The availability factors are continuously on the decline for the last three years due to various maintenance issues. Maintenance of power plants has not been followed according to the approved schedule of NPCC. Despite NPCC approvals, GENCO-II did not avail shutdowns. Such imprudent practices have essentially led to de-rationing in capacity of units. Inadequate expertise has been noted to handle technical problems of switchyard equipment. Failures of the switchyard equipment at GENCO-II have been among the major reasons for large blackouts in the system. The data pertaining to heat rate indicates that, over the last three years, most of the time, actual heat rate has remained higher as compared to the Nepra's approved heat rate, reflecting inefficient operation of power plants. Over the last three years, GENCO units have consumed more auxiliary power, as compared to what is allowed. It is estimated that extra power consumed by TPS Guddu over the last three years resulted in loss of 121.089 GWh, leading to a financial loss to the national exchequer.
DISCOs continued their rudderless functioning without due regard to the desire for improving T&D losses and recovery ratios, removing overloading of key components and lack of prioritization of development work, which is critical in the wake of upcoming generation projects and elimination of load shedding. Due to the constraints in PESCOs network, the report noted that around 580 MW of otherwise available power cannot be delivered to the end-consumers. Similarly in SEPCO area around 215 MW of available power cannot be supplied to consumers. In Qesco 710 MW of available power cannot be supplied. Similar constraints have also been noted in other Dsicos which need to be addressed on priority to support policies of the federal government.
The total installed generation capacity of Pakistan as on 30th June, 2016 stands at 25374 MW, against 24961 MW on 30th June, 2015, recording an increase of 413 MW or 1.65% over the last year. The power plants connected with NTDC and K-EL's system generated 112033 GWh during 2015-16 as compared to 108916 GWh units produced during 2014-15. During 2015-16, the major additions to the system were projects of Rahim Yar Khan Mills (Bagasse based), Chiniot Power (Bagasse based), Sapphire Power (Wind based), Appolo Solar (PV Cell based), Best Green Solar (PV Cell based) and Crest Solar.
Meanwhile, Ministry of Water and Power has cast doubts on the statistics provided in Nepra's State of Industry report 2016. A spokesman for Water and Power Ministry told Business Recorder that since the report was not issued on time and as the power sector achieved many milestones in the meanwhile, therefore the report's data needs a critical appraisal. He further said the Ministry is making all-out efforts to bring in sustainable reforms in the power sector and is open to positive suggestions. The spokesperson further said the Ministry is examining the report in detail and will issue its point of view shortly.
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