KE: load-shedding challenge

On January 15, Karachi residents and industrialists harshly criticized K-Electric during a public hearing at the National Electric Power Regulatory Authority (NEPRA), accusing the utility company of failing to provide reliable and uninterrupted electricity to domestic consumers and industrial areas, including export processing zones. NEPRA directed K-Electric to submit a report on load-shedding.

Earlier, on December 4, 2024, K-Electric had announced it would not reduce the duration of load-shedding in parts of Karachi, even during winter. The Special Committee of the Sindh Assembly was informed that various parts of the city were experiencing 18-hour-long electricity outages, alongside daily power interruptions that also caused water shortages.

Protests against prolonged power outages in Karachi have become a recurring phenomenon. Demonstrations held in September and November caused severe traffic jams on major roads, disrupting movement for hours. In some instances, violence was narrowly avoided.

A political party earlier staged a sit-in at K-Electric’s headquarters, demanding an end to extended outages and warning of public backlash if the situation persisted. Electricity load-shedding in the city now spans seven to ten hours daily, with some areas facing outages for an entire day or even two consecutive days. In October, the National Assembly Standing Committee on Power criticized K-Electric for extended load-shedding despite overcapacity in the system, but no tangible action was taken.

When the state-owned Karachi Electric Supply Company (KESC) was privatized in November 2005, it was hailed as a transformative step in the power sector. However, the anticipated benefits of privatization have not materialized.

NEPRA’s “State of Industry Report 2023” highlights that neither the government nor consumers have benefited from privatization. The private sector, which acquired 73% of KESC’s shares and management control, was expected to improve services through professional management, fresh investments, and modern technology. Yet, nearly two decades later, millions of consumers continue to face deteriorating conditions.

Frequent load-shedding and unscheduled outages have severely disrupted daily life in Karachi, affecting water supply, industrial production, trade, and the economy. On September 23, the Sindh Provincial Assembly was informed that 81 industrial units—including 10 textile mills, 5 sugar mills, and a cement plant—had shut down in the past five years due to the electricity crisis in Karachi and Sindh. Industrial consumers have resorted to alternative solutions such as captive power plants, diesel generators, and solar installations to sustain operations. K-Electric also supplies electricity to regions beyond Karachi, including Dhabeji and Gharo in Sindh, as well as Uthal, Vinder, and Bela in Balochistan.

Despite submitting ambitious plans to meet Karachi’s growing electricity demand, K-Electric has made only marginal improvements to its installed capacity since 2009. Over the past five years, it has added just 589 MW to its system, representing a mere 20% increase since 2019. Promised upgrades to power transmission, distribution, and customer service systems have largely remained unfulfilled.

K-Electric operates several thermal power plants, including Bin Qasim I, II, and III, the Korangi Combined Cycle Power Plant, Korangi Town Gas Power Station, and the SITE Gas Turbine Power Station, with a combined capacity of 1,875 MW.

These plants rely heavily on expensive re-gasified liquefied natural gas (RLNG), significantly increasing production costs. The continued use of inefficient facilities like the Bin Qasim Thermal Power Station 1 has further burdened consumers with inflated electricity bills.

According to NEPRA, K-Electric system has an installed capacity of 3,523 MW and a dependable generation capacity of 3,121 MW. Additionally, it receives 1,100 MW from the National Transmission & Despatch Company (NTDC) through the national grid.

However, consumer demand, estimated at 3,600 MW to 4,100 MW, results in a shortfall of approximately 500 MW. Instead of focusing on enhancing its own generation capacity, K-Electric has increasingly relied on NTDC for power supply. This dependence is concerning, given that surplus power capacity in the national grid is only temporary. K-Electric’s plans for significant investments in grid expansion by 2030 remain uncertain, as it has yet to renew its power purchase agreement with NTDC, which expired in January 2015.

At least 30% of K-Electric’s network—categorized as high-loss feeders—experiences daily load-shedding. In May 2024, the company claimed that 10-hour outages were necessary to combat theft and losses. However, this assertion is misleading.

K-Electric achieved a bill recovery rate of 93% in 2023, and its aggregate technical and commercial losses stood at 15.27%, which is lower than many national DISCOs. NEPRA has criticized K-Electric for using theft and recovery issues to justify load-shedding and may impose daily penalties if such practices persist.

Both NEPRA and the federal government, which retains a 27% stake in K-Electric and representation on its Board of Directors, have failed to address the company’s persistent underperformance. After reporting a net profit of Rs. 8.5 billion in 2022, K-Electric posted losses in 2023, with receivables surging to Rs. 229 billion, and a net profit of Rs 800 million in 2024. There seems to be no check on the company’s financial position.

In conclusion, K-Electric’s inability to address Karachi’s electricity woes continues to burden residents and industrialists alike. With load-shedding expected to worsen as summer approaches, the prospects for improvement remain bleak.

Copyright Business Recorder, 2025