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July 16, 2020

K-Electric CEO apologises to residents of Karachi for frequent power outages


July 16, 2020

K-Electric (KE) Chief Executive Officer (CEO) Moonis Alvi apologised to the people of Karachi on Wednesday as he accepted that the city had been witnessing load-shedding, which, according to him, had been happening quite more.

Ironically, this statement came after the Federal Minister for Planning, Development & Special Initiatives Asad Umar in his recent visit to the metropolis to address the power woes announced that the power utility would not carry out unannounced load-shedding from last Sunday onwards.

The reason of the load-shedding, according to the KE chief, was the high demand of 3,560 megawatts (MW) and in their best case scenario, the power utility, he said, generated 3,200 MWs.

He was addressing a news conference at the KE’s office to allay the concerns of Karachi’s consumers regarding the power supply situation and address misinformation around various power-related issues.

Alvi assured the people of Karachi that the power generation would be improved in a few years. He added that in the next few days when the temperature would relent, the load-shedding would reduce.

Had the government approved a new 700MW power plant back in 2016, he said, Karachi's power supply would have been better. "In 2016, the power plant project had a setback due to technical reasons," he said, explaining that the power utility company was asked to focus on power generation using the local variant of coal, whereas the ‘system’ was designed for the use of imported coal.

"It takes two-and-a-half to three years to set up a new power plant,” Alvi explained. KE Chief Financial Officer Aamir Ghaziani and Chief Distribution Officer (CDO) Amer Zia also spoke on the occasion.

Alvi talked about KE’s ambitious investment plan that would see $2 billion spent across the power value chain over the next three years, including a 900MW RLNG-fired power plant as well as downstream transmission and distribution upgrades.

In addition to it, the power utility would be investing in interconnection infrastructure with a view to evacuating additional power from the national grid on a priority basis, he said. The federal government had also committed to expedite infrastructure upgrades at the national grid so that an additional power of 300MW could benefit Karachi in 2021, supplemented by a further 400MW in 2022 and 800MW in 2023, he explained, adding that in this regard, the power utility had already sought necessary regulatory and governmental approvals, and following the timely receipt of the same, KE would be in a position to materialise the large-scale power projects that would move Karachi into a power surplus position.

Regarding the current power supply situation of the city, the KE CEO appreciated the support of the federal government for streamlining fuel supplies that had created a considerable strain on the generation units. He added that gas- and furnace oil-related arrangements had been discussed and an agreement had been reached on them with the ministry.

Depending on appropriate gas pressure and regular fuel supplies, KE’s power generation could be maximized, Alvi said. The technical fault at one turbine of the Bin Qasim Power Station (BQPS) -1 was also being swiftly rectified with teams working round the clock, he added.

The KE CEO said that since 2009, the power utility had invested over $2.4 billion in power infrastructure upgrades and additions, including 1,057 MW to its own generation capacity and 1,000MW through power purchase agreements, building 13 grid stations and upgrading distribution system through hundreds of additional feeders and thousands of additional transformers.

According to Alvi, such steps had reduced the transmission and distribution (T&D) losses from 36 per cent to 19 per cent, resulting in load-shedding exemption for 77 per cent of Karachi including all the industrial zones. He, however, also maintained that load-shedding was also in line with the National Power Policy 2013, in accordance with the rest of the country and was purely on account of power theft.

Even in areas with extremely high levels of power theft, cumulative load-shedding hours did not exceed eight hours, Alvi claimed. He added that the load-shedding schedules are uploaded on the KE website on a daily basis and SMS are also sent out to all customers who are registered with the power utility’s 8119 SMS service.

He explained that sometimes faults, tripping incidents or any outages due to emergency complaints could occur due to weather or environmental conditions and were rectified on a priority basis even in the backdrop of the COVID-19 pandemic which had been creating workforce challenges. Load-management was only necessitated when the generation capacity was compromised or the demand outpaced the supply on account of high temperatures and humidity as well as erratic power supplies from IPPs, he said.

Alvi remarked that the current situation was unprecedented and in an effort to provide relief to its residential customers during the late-night hours, KE had been managing the load through industrial load-shedding despite the fact that it impacted negatively on the company’s financial health and profitability.

He also clarified what he said some prevailing misconceptions about KE’s billing, highlighting that the power tariff was set for all DISCOs by the National Electric Power Regulatory Authority (NEPRA) and KE could not make any modifications to it.

He similarly maintained that KE’s meters were manufactured according to the international standards and purchased from the same suppliers as all other DISCOs. He also rejected the impression that the power utility underutilised its generation on furnace oil so as to reduce its costs. Rather, he said, fuel costs were passed through in line with the Nepra-approved mechanism and thus it made no difference to KE what fuel was utilised to generate power.

Alvi maintained that KE’s upcoming plants were efficient and would utilise low-cost fuels that would make power more affordable and reduce the impact on the national exchequer. “Our first focus right now is addressing the upcoming monsoon challenges which include urban flooding and drainage issues. We are working closely with all relevant authorities in the interest of public safety and we request the support of our friends in the media fraternity to further propagate messages related to public health and safety,” the KE CEO said.