Some committee members accused K-Electric of not meeting its commitment to invest in enhancing power generation which was ruled out by K Electric authorities who claimed that they had added 1037 Megawatt by installing four efficient power plants. Chairman Nepra, Barig Tariq Sadozai (retired) said that K-Electric's net capacity was 1822 MW, IPPs generated 994 MW including 650 MW from national grid giving it a total generating capacity of 2816 MW but the utility generation was 2478 MW during June 18-24, 2014. K-Electric's own generation was 1550 MW whereas 928 MW was acquired from IPPs, or a total of 2478 MW, against the average demand of 2800-3000 MW. The utility was facing a shortfall of 370 MW to 400 MW.
According to Chairman Nepra, K-E operated its plants at full capacity and also purchased available power from IPPs. With this generation, load shedding duration should not be more than 4 hours, however, K-Electric admitted that the duration of load shedding in low recovery areas was 7.30 hours whereas industry and posh areas where recovery is above 90 per cent were exempt from load shedding.
K-E's plant utilisation factor was 87 per cent but the utility produced only 43 per cent in 2012-13 against available capacity from own resources and 46 per cent in 203-14. The entity used 650 MW of national network to keep its own generation low. Nepra issued a show cause notice to the utility for under utilisation of its own resources.
Chairman Nepra further stated that over the last three years, K-Electric under-utilised its own resources and the utility has been directed to provide more data which they are supposed to supply to the regulator. Commenting on recent crisis, he said, Nepra's team visited Karachi and observed that K-Electric supplied 2700 MW to the system during June 18, 24, 2015 despite the fact that it did not supply more than 2200 MW during the last three years.
"This heavy load coupled with immense heatwave led to transformers bursting due to which the K-E's distribution system collapsed," he added. According to him, in some areas load shedding duration was 12 to 14 hours whereas some areas faced 24 and 96 hours continuous load shedding in areas where losses were 30 per cent. However, after four to five days, faults were removed or transformers were replaced. K-Electric management did not take prompt action.
Commenting on supply of 650 MW from the national grid, Chairman Nepra said that during initial agreement between KESC ( now K-Electric) from 2005 to 2009, applicable tariff was based on marginal rate which implies that NTDC will provide extra electricity produced by operating expensive plants and rate will be charged on the basis of cost. However, in 2009, when the agreement was revised with new management, it was decided to provide electricity to the utility as per Discos rate and the difference of Rs 31 billion from 2005-2009 calculated on the basis of marginal tariff was not received from the utility. Senator Nauman Wazir Khattak said that it was totally in favour of K-Electric and not in favour of the rest of Pakistan.
Chairman further disclosed that the generated cost of electricity provided to K-Electric was Rs 112 billion against only Rs 44 billion received and the difference of Rs 68 billion was charged to the consumers of Discos. Nepra issued show cause notice to K-E but the latter obtained stay order from the court. He further stated that if K-Electric operates its plants on furnace oil at full capacity and supplies to Karachi, it would face a Rs 7 billion loss per annum, adding there is no GSA agreement with SSGC.
Tayyab Tareen, Chief Executive Officer, ruled out prolonged load shedding and said that there were technical faults in some pockets which were addressed. However, he pointed out that K-Electric teams were stopped from removing faults in some areas. He said that K-electric had invested $1.2 billion in power generation and distribution system and had installed 1000 MW gas-fired efficient plants and reduced losses from 40 to 23 per cent. He said that there was no load shedding during Sehr and Iftar and it had operated its own power plants at 100 per cent capacity to meet the needs of Karachi.
K-E's management requested the committee members to visit their office and plants to witness how much the utility has invested in generation, distribution and transmission.
Member Committee Sirajul Haq said that K-Electric, Karachi Water Board and hospitals were responsible for the crisis. He said that patients were not admitted to hospitals due to which people died. Senator Mukhtiar Ahmed Dhamrah said that there were differences in figures of load shedding between K-Electric and Nepra and proposed that a sub-committee should be formed to sort out the reasons for the crisis.
Senator Taj Haider said that there was a violation of law as some areas were being provided uninterrupted power supply while some were subjected to load shedding. He said that there should be equitable loadshedding and power supply to defaulters should be disconnected.
Senator Nauman Wazir Khatak said that inquiry should be held to determine the causes of causalities in Karachi. He said that the role of NDMA, PDMA Water and Power Ministry, regulator and K-Electric should be determined in the whole crisis. In a fiery mood, Senator Nisar Muhammad said that those four persons who signed the amended agreement with KESC in 2009 should be hanged as they inflicted a Rs 32 billion financial loss to the national exchequer. He alleged that K-Electric has pocketed Rs 361 billion through manipulation but not passed it on to the consumers of Karachi. He also gave a copy of the report prepared by the previous Standing Committee on Water and Power headed by Senator Zahid Khan.
Senators also demanded that power distribution companies especially Pesco should not stop power supply to high loss feeders. They said that it was against the law and recommended that power supply should only be disconnected to those consumers who were not paying bills. They said that it was the decision of the Supreme Court to implement equitable distribution of power but power firms were discriminating.
Earlier, on questions raised by Senators from KPK, Chairman Nepra informed the committee that the regulator has come up with a new formula to recover the cost of power transmission system from the consumers. "We have decided to include the cost of transmission system in built up tariff from 2015-16 so that the Discos should not wait for funding from the government," he clarified.
Chairman Nepra further stated that petitions of Discos were being received for new tariff and the regulator would allow them to recover cost of transmission lines from the power consumers. Earlier, Discos had asked parliamentarians to provide money from their funds to lay transmission lines and now the burden was going to be put on consumers. He further said that the regulator had asked Discos to conduct a study to assess the technical and administrative losses. He said the regulator would be allowed to recover only technical losses from the consumers whereas power firms would have to pay the cost of power theft.