AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)

Reportedly, the energy regulator NEPRA is initiating legal action against DISCOs due to their deteriorating performance in transmission and distribution losses and poor recovery. News flow suggests that the financial impact of unrecovered dues has increased by one-third to Rs315 billion in FY24 compared to Rs236 billion in the previous year.

This poor performance could be attributed to multiple factors. For instance, the decline in recovery can be linked to rising electricity costs, which have adversely impacted affordability. This not only increases defaults on bills but could also contribute to higher theft, exacerbating operational losses.

On the other hand, the high target of 100% recovery from DISCOs remains intact. This results in higher losses, even if recovery ratios are maintained year over year, as increased prices create a higher deficit in rupee value. This presents a chronic challenge.

Some DISCOs are actively working to clamp down on theft and are consistently acting against illegal connections. Regular reports detail crackdowns across the country, and there are also multiple initiatives being undertaken to lower production costs, such as negotiations with IPPs. However, the long-term impact on investment could offset the benefits of lower prices.

One cannot overemphasize the need for improving governance and addressing the sector’s challenges in a pragmatic and holistic manner. This is easier said than done, yet it is extremely important for fixing the sector.

Long-term sustainability in the power sector may require flexibility in decision-making. On the issue of electricity theft, it is imperative to strengthen and enforce legal frameworks so that those involved in theft or chronic default are held accountable by the system, instead of loss-laden DISCOs bearing the brunt.

Moreover, the regulator must recognize the ground reality; 100 percent recovery is nearly impossible without improvements in the broader macroeconomic landscape. This gap will continue to drive circular debt. The tariff-setting process must also account for operational realities by providing recovery cost allowances and ensuring adequate returns for DISCOs.

An ideal scenario would be one where the government generates sufficient revenue through taxation to offset the expenses incurred by DISCOs. This should be complemented with better tariffs for utilities that incentivize investment and offer adequate returns when operational performance improves. DISCO governance systems should actively detect theft, and legal systems should be strict and swift in addressing such acts. This combination can help deter theft.

Achieving this vision requires the government to zoom out and consider the intersections of the power sector with other areas. It’s essential to move beyond isolated victories and work toward implementing holistic measures.

Actions like these will embody the true spirit of governance and help steer the sector towards improvement. The journey is slow and challenging, but it is one that must begin.

Comments

200 characters
KU Nov 14, 2024 10:16am
The chain of command-theft in our electricity, gas as well as fuel is a subject that would be envy of a best selling crime novel. How does it thrive without being caught? Because everyone is involved.
thumb_up Recommended (0) reply Reply
Saleem Zia Nov 14, 2024 02:45pm
Under these **Corruption Laden Government Institutions And Regulators Never to Expect Beneficial Social Reform Policies By These Gov'ts??**.
thumb_up Recommended (0) reply Reply
Nasrullah Khan Nov 15, 2024 08:31pm
Elites either steal power or keep on using until bills run into crores then make installment at meagre rates ....take new connection or shift to solar
thumb_up Recommended (0) reply Reply
Arsalan Nov 18, 2024 03:30am
When these govt looters know that who is going to challenge them and when every loss they make will be covered by our tax money, this looting will continue. unless there is a check n punishment system
thumb_up Recommended (0) reply Reply
Arsalan Nov 18, 2024 05:28am
who cares, our tax money is for this corruption to cover. n when that is all used, we will go to imf again. who cares what these criminals r doing. tax us more, finish us off!!
thumb_up Recommended (0) reply Reply