LAHORE: As a severe financial squeeze gripped the power sector, closing down over 1,500MW plants over the past 48 hours, electricity deficit shot beyond 7,000MW on Wednesday, forcing over 10 hours of loadshedding from urban feeders and 15 hours in those rural feeders that have escaped flooding and have not been without power in recent days.

According to planners at the Pakistan Electric Power Company (Pepco), there is financial chaos in the sector. The independent power producers (IPPs) have gone public with a Rs230 billion bill and some of them have even invoked sovereign guarantees.

As if that was not enough, the Pakistan State Oil (PSO) has forwarded a bill of Rs187bn to the power sector. This is in addition to Rs34bn claimed by the Water and Power Development Authority (Wapda).

Although the Rs187bn dues are against the entire sector, including the IPPs, a part of them is also against the public sector generation companies.

The Pakistan Atomic Energy Commission is also around with a bill of Rs6bn.

The amounts have cumulated because of abysmal bill recoveries by the distribution companies, according to an official of the National Transmission and Dispatch Company (NTDC).

In July, recoveries were down to 81 per cent. A 19pc loss in recovery is translated into Rs30bn. Tentative calculations for last month show 83pc recoveries — a loss of another Rs34bn. Thus the sector has not been able to recover Rs64bn in the last the two months. If losses above the permissible limits are added, the total loss crosses Rs70bn .

The official wondered how the sector could be run with losses of over Rs1bn a day.

“All this has resulted in reduction of generation by almost 1,500MW in the past two days,” a Pepco official said.

With the sector having no money to buy fuel, Hubco’s generation dropped by 300MW, Jamshoro by 300MW, Guddu 400MW and Muzaffargarh 600MW. This is in addition to the almost permanently closed Japan, Saba and Sapcol plants.

The hydroelectric power generation has suffered over the past 10 days because of massive flooding and resultant reduction in water releases from both the dams. The releases from Tarbela Dam are restricted to 48,000 cusecs and Mangla 66,000 cusecs.

“All this resulted in bringing the generation down to 12,000MW against the total demand of 19,000MW by late Wednesday evening,” the official said.

“The next few days would be even tougher as the financial pinch is bound to worsen and the hydel relief would not be coming due to continued flooding in the country. The IPPs and the PSO are unable, or unwilling, to budge and both have gone public with their bills – the IPPs started an advertisement campaign and the PSO held a briefing at the Lahore Stock Exchange — because they are now finding it hard to run their businesses due to the financial strangle taking the sector down with them,” he warned.

Published in Dawn, September 18th , 2014