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Thursday June 30, 2022

Power problems

By Editorial Board
April 02, 2022

The country is currently running an electricity deficit of over 5,000MW that has forced authorities to shed load to reduce the burden on generation infrastructure, leading to rolling blackouts across the country. This is not an outcome of some force majeure, but a job perfectly botched by power managers, who according to independent experts seem to be off their rockers. To make things worse for consumers, Nepra has also approved an additional fuel cost adjustment (FCA) of nearly Rs4.7 per unit for ex-Wapda distribution companies (DISCOs). For K-Electric there will be another Rs3.3 per unit additional FCA. The FCA for electricity consumed in February for DISCOs is likely to yield over Rs38 billion additional funds to the companies and for January nearly Rs3.5 billion for K-Electric in April.

DISCOs have repeatedly been demanding an increase in FCA to generate additional funds. There are two points of significance here. One: whatever fuel adjustment is made, ultimately consumers end up bearing all additional burden as they pay more for their bills that include such adjustments. In fact, ‘adjustment’ is just a euphemism for the cost that consumers pay to generate additional funds – money – for distribution companies. Two: the shortfall that consumers face even after all such ‘adjustments’ have been incorporated. Nearly 5,400MW shortfall is not small in magnitude nor mild in intensity in terms of the crisis that is set to befall consumers. Even more disturbing is the fact that this deficit is not caused by lack of capacity to generate electricity. The main reason is that required volumes of fuel are not available to sustain power generation that is highly dependent on consistent and uninterrupted fuel supplies. Another reason for the shortfall is not the capacity but the technical incapability to rectify tripping at Karachi Nuclear Plant (K-2). Unless our power managers are able to keep K-2 constantly in order so that it does not go out of the system frequently, the shortfalls will persist. There is also an inordinate delay in commissioning K-3, which is still in the testing phase. To compound this ordeal for consumers, there are also repeated technical faults at Chashma Plant-1.

The way the government has managed – rather mismanaged – our power sector in the past couple of years leaves much to desire. If the government has been claiming that generation capacity of 40,000MW is available, then we have a right to ask why the country is facing a shortage of over 5,000MW, especially when summer has hit the country. The government has been approving unrealistic reference fuel cost estimates that are not in consonance with the regulator turnout. The ‘experts’ who manage the power sector must have better analytical skills coupled with effective financial management expertise. When actual fuel costs are persistently much higher than the reference rate, it reflects on poor management skills that ultimately affect common consumers across the country. The citizens of Pakistan cannot afford more and repeated price shocks like this, nor are they ready for an increase in the base power tariffs that add to their burden. They need affordable and uninterrupted power supply – not 10-12 hours-long loadshedding.

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