Nepra imposes Rs 0.6 million fine on KESC for poor performance

The National Electric Power Regulatory Authority (Nepra) has imposed a fine of Rs 0.3 million on Karachi Electric Supply Company Limited (KESC) for poor performance. This is the first time that Nepra has exercised its powers to slap a penalty on any power distribution company.
Nepra had been receiving complaints regarding poor performance of KESC, especially its inability and unwillingness to fully utilise the available generation capacity from the IPPs operating in Karachi. The performance of KESC was severely criticised by electronic and print media as well as by the consumers of electricity in Karachi regarding its failure to restore power supply after a breakdown which occurred on June 17 and 18, 2009 which kept the metropolitan city of Karachi without electric power for 18 hours.
Nepra had earlier deputed a technical enquiry team to look into the complaints and, on the basis of the conclusions of the enquiry committee report, issued a show-cause notice to KESC. Hearing was conducted by the Authority wherein the CEO and other senior officials of KESC explained their viewpoint. Keeping in view the evidence placed before the Authority and the available record, Nepra, the electricity power regulator, decided to impose a penalty on the KESC.
According to the Rules, Nepra can impose a maximum penalty of Rs 0.3 million, prescribed under section 29 of the Act, and this has been imposed on KESC for its failure to provide uninterrupted power supply to its consumers as per its obligations under the licence conditions.
Another fine of Rs 0.3 million was also imposed on the KESC for its failure to dispatch adequate power from its own plants and IPPs, which resulted in shortage of power and resultant available load shedding in Karachi.
The Authority has further observed that if KESC continued with the practice of reducing or under-utilising its generation capacity from IPPs, further strict punitive action would be taken against it in future.
In addition to the fines imposed by Nepra, a number of directions have also been issued to KESC by Nepra, which include: improving standard operating procedures (SOPs) and ensuring strict enforcement of these SOPs in case of power failure, providing black start facilities and ensuring proper function of relay system.
KESC has also been directed to appoint in-house experts, or consultants, to carry out detailed system studies including transient analysis on its protection schemes including those at the power plants.
The Authority has directed KESC to finalise the study within 12 weeks and submit its report to the Authority. The Authority has warned and directed KESC to ensure regular and timely payments to NTDC as well as to IPPs so that the power supply from these sources remains uninterrupted and does not cause any hardships for the citizens of Karachi.
Nepra has also issued similar instructions to other power distribution companies during the ongoing quarterly tariff proceedings wherein they have been told to reduce their distribution losses, improve their efficiency, cut down their operation and maintenance expenditures, and ensure consistent and reliable supply of electricity to its consumers at the least cost.