Unannounced outages: Nepra imposes Rs250m fine on Pesco, Qesco, Hesco, Sepco and KE

ISLAMABAD: The National Electric Power Regulatory Authority (Nepra) has imposed fines totaling Rs250 million on five power distribution companies, including K-Electric for unannounced power outages during May and June 2022 on commercial grounds.

Nepra concluded its investigations and penalised these distribution companies, for engaging in loadshedding on commercial grounds, in violation of NEPRA regulations. The fined companies include Peshawar Electric Supply Company (Pesco), Quetta Electric Supply Company (Qesco), Hyderabad Electric Supply Company (Hesco), Sukkur Electric Power Company (Sepco), and Karachi-based privatized K-Electric (KE). The fine is Rs50 million for each company.

The power regulator disclosed that these companies were found to have implemented commercial loadshedding on their systems for durations ranging from 4 to 16 hours.

K-Electric, the main electricity provider in Karachi, Pakistan’s biggest city, faced criticism from NEPRA as the authority disapproved of its actions during tough economic times. Nepra’s fine comes as a response to what it deems as inefficient operations by K-Electric, exacerbating the plight of consumers already grappling with inflation and surging fuel prices.

In its defence, K-Electric highlighted the economic challenges facing the nation, arguing that dwindling consumer bill payments and escalating commercial losses have forced its hand in resorting to increased loadshedding on select feeders. However, Nepra remained unswayed, asserting that better strategies should have been implemented instead of burdening consumers with loadshedding. Moreover, Nepra’s investigation uncovered glaring lapses in K-Electric’s operations, particularly in combating illegal connections and addressing Aggregate, Technical, and Commercial (AT&C)-based loadshedding, which persist on 30 percent of its feeders, contrary to its claims of prompt disconnection of defaulters. Nepra noted that weekly monitoring reports reveal discrepancies in loadshedding practices, undermining licensee assertions of effective governance measures.

In the Sepco case, Nepra addressed its claims regarding loadshedding practices following Nepra regulations. Moreover, Nepra disputed claims that the Supreme Court declared Nepra laws obsolete and clarified that equitable distribution mechanisms remain valid. Consequently, the Authority rejected Sepco’s response to the show cause notice and imposed fine for violations of Nepra regulations and distribution license terms. Additionally, Sepco is deemed non-compliant with Authority directives.

Likewise, Hesco claims adherence to Nepra laws but disputed the legality of the show cause notice. Nepra criticised loadshedding practices. The regulator noted that Pesco implements loadshedding based on AT&C losses but fails to meet its allocated power quota, leading to excessive shedding. In the Qesco case, the Regulator noted that the licensee claims load management coordination with NTDC, but it faced issues with loadshedding implementation.