KE may induct rental projects for limited period

Updated 11 Jul 2020

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Consumers call for ending monopoly by allowing more utilities in megacity during an open hearing by Nepra. — AFP/File
Consumers call for ending monopoly by allowing more utilities in megacity during an open hearing by Nepra. — AFP/File

ISLAMABAD: The K-Electric (KE) and the power regulator on Friday hinted at inducting rental power projects and doing away with peak and off-peak tariff during the period of prolonged power cuts amid severe criticism from consumers over poor service and call for ending monopoly by allowing more utilities in the country’s largest metropolitan of 15 million.

These were the key takeaways of a public hearing conducted by the National Electric Power Regulatory Authority (Nepra) on extensive load-shedding being done by K-Electric for more than a fortnight now. The proceedings conducted through video link gave consumers a rare opportunity to vent their anger against the power utility.

KE Chief Executive Officer (CEO) Moonis Abdullah Alvi held the federal government responsible for prolonged power outages in Karachi. He said the utility was not allowed to set up a coal- based plant of 700mw and the required oil and gas supply was not provided to the KE that resulted in low production of electricity than demand.

He said it was not possible for the utility to end load-shedding at this stage, not even at night time.

The KE CEO said that the Pakistan State Oil (PSO) had asked for a confirmation order of oil supply in May which was provided well in time. The PSO informed the federal government that it could not meet requirement of oil demanded by the KE from local refineries and called for removing ban on import of furnace oil. As it took time, he said, the PSO conveyed its inability to provide oil in time and advised the KE to make arrangements for taking local gas or imported RLNG.

Consumers call for ending monopoly by allowing more utilities in megacity

Mr Alvi said about 250mmcfd gas was being provided to the KE by the federal government against a promise for 280mmcfd. As such, oil supply was not ensured and gas supply was not increased as well.

He said the National Power Control Centre (NPCC) had increased power supply to about 730MW but he was called out of this hearing by the centre and asked to reduce offtake by 100MW.

He said the KE was producing 2,500MW electricity against demand of 3,300MW. He indicated that oil would arrive at KE power plants in 24 hours and electricity production would start to improve the situation in Karachi. He said even other power plants — Tapal and Gul Ahmad — were also not producing electricity to their full capacity due to shortage of oil.

He said the KE was working on projects of transmission at a cost of over $400 million. He said 30 to 40 feeders remained closed due to maintenance. He said power demand went beyond 3,600MW last week and that there was no issue with transmission or distribution network but the key problem was generation constraints.

Nepra Chairman Tauseef H. Farooqi raised questions about the performance of the KE and observed that it was fulfilling its obligations but giving an impression as if the government departments and institutions were stopping it from fulfilling its responsibilities of providing uninterrupted electricity to consumers.

He said he had not seen any work being done on improving transmission system by the KE since he assumed office early last year. He said Nepra had requested the federal government to enhance power supply from national grid but the KE system was not able to take additional supply due to transmission constraints.

The KE chief said here again the federal government was responsible because it was not allowed to set up a plant where transmission and distribution network was available and did not commit until a few weeks ago a connecting point where national grid could deliver additional supply.

Several interveners observed that the KE had taken stay orders against power generation by bulk power consumers. They demanded an end to monopoly over power generation and distribution in the city which was strongly opposed by the KE chief who said there were some protections in the contracts. He said the utility would hold meeting with the federal government next week for demand and supply of electricity in 2021 and discussions were in progress with the federal government to induct rental power plants for two to three months.

Some interveners complained that power utility had failed to keep pace with demand growth and despite suppressed demand due to Covid-19 related closure of educational institutions and businesses and partial operations of industries, the shortage went beyond 300-350MW which meant the actual shortfall was way above 500-600MW if the city returned to normal.

Others pointed out that it was strange that shortfall remained more pronounced even during off-peak hours while the KE met most of the demand during peak hours. This meant the high peak charges were main revenue attraction to the utility.

The Nepra chief said the regulator would consider doing away with the tariff difference as part of its public hearing. The KE chief said the regulator would then need to increase rate for off-peak consumption.

Sindh Energy Minister Sindh Imtiaz Ahmed Shaikh said fuel supply to the KE should be ensured.

Meanwhile, the KE in a statement, issued after the Nepra hearing, said that the current situation has been further aggravated due to demand surges on account of high temperatures and erratic power supplies from the Wind Corridor and suspension of supplies from KANUPP. In an effort to provide relief to its residential customers during late night hours, the KE has been managing load through industrial load-shedding despite this impacting negatively on the company’s financial health and profitability.

Published in Dawn, July 11th, 2020