Concerns abound as KE seeks licence for 20 years

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ISLAMABAD: K-Electric on Tuesday pleaded for a non-exclusive distribution and supplier licence for the next 20 years amid concerns from some consumers if such an instrument would ensure affordable and sustainable electricity to even the lower income groups and what would be the safeguard mechanism. The National Electric Power Regulatory Authority (Nepra) held the public hearing and would come up with its determination on KE’s two petitions on distribution and supplier licence for 20 years as its exclusivity licence expired last year. There were also some suggestions for conditional licences for a few years instead of for two decades. Nepra Chairman Waseem Mukhtar led the panel which also included all four provincial members including Rafique A. Shaikh, Mathar Niaz Rana, Maqsood Anwar Khan and Amina Ahmed. The issues that came under discussion included load-shedding, the reliability of figures shared by the KE and the performance of its obsolete generation plants. KE’s proposed distribution and supplier licences will be for its service territory including Karachi, Dhabeji, Gharo in Sindh and Balochistan’s Hub, Bela and Vinder regions. The hearing was attended by various stakeholders including those representing Karachi’s industries and the general public. WEB DESK
Chief Financial Officer Aamir Ghaziani, Chief Distribution Officer Fawad Gilani and Chief Marketing and Communications Officer Sadia Dada represented KE and addressed questions framed by the regulator.

The KE’s team claimed that a capital expenditure of around Rs544 billion ($4.4bn) had been made towards improving the power supply in Karachi, leading to an addition of 1,957MW of generation capacity and 12 percentage point improvement in fleet efficiency – from 30pc in 2005 to 42pc in 2023. Since the most efficient 900MW RLNG plant was commissioned in the last quarter of FY23, the fleet efficiency would increase to 49pc when the said power plant will operate for the entire year.

Most of the conversation revolved around the tariff and seeking tariff benefits for industries based in Karachi. Some participants expressed satisfaction with the network and associated services while others suggested improved strategies.

In response to questions about improving the reliability of services, the company highlighted that it has invested in IT and tech-based interventions to modernise the infrastructure and improve service delivery. These include pioneering initiatives such as the use of a Geographical Information System (GIS) and the deployment of 60,000 smart meters enabling greater visibility over power consumption trends.

“We remain committed to providing customers with the best quality of services. Our Rs484bn upcoming investment plan and proposed addition of over 1,200MW renewable energy are indicative of this,” said Aamir Ghaziani.

He attributed higher borrowing costs, less energy sent out, fuel costs and less recovery due to higher inflation to Rs40bn financial losses during 2022-23.

Some of the consumers’ representatives supported both petitions of KE and suggested the power utility should not turn off electricity to private hospitals even if they were in high-loss areas. They proposed that load-shedding should be on PMT (pole-mounted transformers) instead of shutting down entire feeders.

Arif Bilwani raised questions on the proposed investment statistics, reduction of technical and commercial losses and proposed generation sources. He suggested Nepra should grant distribution and supplier licences to KE for a few years’ subject to conditionalities which should be reviewed before extension in both licences.

Karachi Chamber of Commerce and Industry Vice-President Tanveer Barry said that before granting a licence to KE all stay orders taken by the power utility should be withdrawn including the one on Nepra’s decision to pay Rs43.6bn as per the claw-back mechanism to consumers.

He said there were reports the government wanted to sell excess electricity to Central Asia in winter but local industries were waiting for their winter package. He conceded 70pc Karachi was now exempt from load-shedding but 30pc were facing load-shedding and all of them were not defaulters or thieves.

The representative of Jamaat–e-Islami, Imran Shahid, severely criticised KE which according to him was not performing well. He suggested action should be taken against Nepra’s legal team for not vacating stay orders.