Rs250mn fine imposed on five Discos for illegal load-shedding

ACTION MARKS FIRST INSTANCE OF NEPRA PENALISING COMPANIES FOR REVENUE-BASED LOAD SHEDDING

The National Electric Power Regulatory Authority (Nepra) imposed a fine totaling Rs250 million on five power distribution firms, including K-electric, for unannounced load-shedding.

The fines, set at Rs50 million each, were levied for excessive load shedding that violated consumer rights and 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.

This action marks the first instance of Nepra penalising companies for revenue-based load shedding, a practice that began over a decade ago in Karachi and was later adopted by public sector entities with implicit federal government approval.

During public hearings and monthly fuel price adjustments, Nepra investigated public complaints about unscheduled load shedding.

It was discovered that the load shedding was executed following an AT&C losses policy, contradicting the Nepra Act, 1997, and Performance Standards (Distribution) Rules, 2005.

Despite receiving show-cause notices and opportunities for defense, the companies largely acknowledged their At&c-based power cuts, attributing them to government policy.

However, Nepra highlighted that these actions contravened their obligations to ensure equitable and uninterrupted electricity distribution.

The investigation revealed that the companies had neglected to improve the technical and financial condition of selected feeders, causing undue hardship to consumers.

Additionally, the Nepra criticised the companies for attributing load shedding to economic conditions, suggesting they also address internal inefficiencies and consider alternative financial management strategies.

Nepra stressed the need for transparency, accountability, and fair consumer treatment, pointing out ongoing At&c-based load shedding on 30% of K-electric’s feeders, which exceeded scheduled durations.

The regulator reaffirmed that load shedding should only be for technical reasons, not commercial motives, criticising the public sector companies for not adhering to Nepra standards and accusing the Ministry of Energy of directing the load shedding.

The reported load-shedding durations varied between 2.5 and 10 hours, with companies allegedly concealing inefficiencies under the guise of reducing line losses through AT&C load shedding.