Recovery, T&D losses: Senate panel reprimand Power Division for providing misleading figures

A Senate panel Friday questioned the existence of the Power Division with the current level of worst-ever performance coupled with misleading figures of recovery and Transmission and Distribution (T&D) losses.

The panel headed by Senator Syed Shibli Faraz, Leader of the House in the Senate, Senator Nauman Wazir Khattak and Senator Siraj-ul-Haq appeared disappointed at the current level of recovery and pace of reduction in losses as the energy sector circular debt touched $ 11 billion.

According to the figures presented by the Power Division, during July 2018 to June 2019, over 114.086 billion units were received by the Discos at 132 kV systems, of which 93.887 billion units were received at 11 kV, which implies that 20.199 billion units were lost - equal to two months average consumption. However, the losses were reduced by only 0.61 per cent if compared with figures of financial year 2017-18.

The Senate panel asserted that with the current speed of reduction losses, flow of circular debt will be brought to zero in 36 years. In the previous meeting, Power Division had claimed that Discos increased revenue by Rs 229 billion during 2018-19, of which Rs 117 billion related to tariff adjustment whereas Rs 112 billion was from improvement in recovery and efficiency.

The head of the panel sought a breakup of the Rs 112 billion from the officials of Power Division and Pepco but detail were not provided which angered the panel members.

"Figures of losses and recovery of Discos are fascinating as price fuel adjustment and other costs have been included in the recovery figures ," Senator Shibli Faraz said and inquired whether the growth in circular debt would be brought down to zero by 2023. He maintained that with ineligibility of Discos, consumers were bearing the price of the fuel component, which is not recovery of losses, adding that Board of Directors (BoDs) of Discos have not been changed which was a relatively easy task.

"In the current situation of the power sector, is there any need for a Power Ministry? If there is no improvement why should consumers pay the salaries of officers of Power Division," he queried.

He added that someone told him that circular debt is now Rs 2 trillion and if calculated in dollars it would be around $ 11 billion. This huge amount is a threat to Pakistani security and economy, Senator Siraj-ul-Haq said.

Chief Executive Officer (CEO), AEDB Dr. Rana Abdul Jabbar said that circular debt is Rs 1.66 trillion.

Technical Advisor Nepra, Zaigham Husnain stated that at the current speed of reduction in losses, it is not possible to reduce the circular debt adding that the difference between the allowed losses and actual losses is the circular debt. He said savings from losses was 0.61 per cent in 2018-19 as compared to 2017-18. The panel was informed that presently load factor is 0.9 per cent.

Senator Nauman Wazir challenged the figures saying that X-EN and SDOs actually overbilled consumers due to which Discos show a reduction in losses, and requested for the actual amount received from consumers against sale of electricity.

Senator Wazir further stated that Nepra should have issued instructions to the companies to improve their systems adding that whatever companies demand from Nepra is allowed to them due to which companies do not make any effort to improve their systems.

"Nepra has failed to safeguard the interests of consumers," he said, adding that when Discos have not performed as per their commitment then why is the regulator not unsympathetic towards them?

He further stated that IPPs collected Rs 40 billion over and above their agreements, adding that the committee had suggested that the tariffs of such IPPs should be readjusted at 15 percent RoE but neither Nepra nor Power Division did anything. He said, it's high time for the Power Division to do something for the people and that 0.61 per cent reduction in losses is actually window dressing. If over billing is excluded the figure of losses will be different, he further stated.

Senator Wazir said smart meters can not curb theft as the power stealers use hooks adding that the load can only improve with installation of capacitors. CEO, AEDB supported the viewpoint of Senator Nauman Wazir Khattak, saying that presently, only solution to improve the load is installation of capacitors.

Senator Shibli Faraz said that he overwhelmingly opposed installation of smart meters but it appears that Power Division has been forced to take a loan from the ADB for this project and it is being initiated in Iesco and Lesco instead of high loss making companies.

The committee was of the view that with installation of smart meters and other measures, no improvement is expected, suggesting that the recovery should be outsourced. Senator Nauman Wazir said that non professional people are sitting in the Ministry.

Senator Siraj-ul-Haq asked the officials of Power Division to have mercy on the people and not to recover losses from consumers. Why should consumers pay for inefficiencies of Discos? He asked adding that Power Division must not place an unfair burden on consumers.

Joint Secretary Power Division, Sajad Yaldram informed the panel that cheap electricity is being added to the system so that prices will be brought down.

According to the official statement, Senator Syed Shibli Faraz took serious notice of the figures presented to the committee and said that these were misleading since fuel price and other expenses are included in it.

Convener Committee, Senator Syed Shibli Faraz expressed regret that even the managing boards of Discos had not been revamped. He emphasized that Nepra should play a proactive role in protecting the rights of the people of Pakistan and underscored the need for effective coordination within the Power Division.