Power theft

Published June 25, 2024

FEDERAL Energy Minister Awais Leghari’s statement during a TV interview that electricity theft amounts to Rs600bn a year is quite revealing. Power theft is not confined to a single geographical territory or province, but extends across the country. According to him, the situation is forcing the distribution companies to impose ‘forced load-shedding’ for hours on end each day in ‘high-loss, low-recovery areas’, in spite of the availability of surplus generation capacity, to penalise electricity thieves and minimise theft losses. It is also one of the multiple factors — the others being high transmission and distribution losses, growing capacity payments to generation companies, poor governance of the power sector, weak exchange rate, lower bill recovery, etc — responsible for the higher cost of electricity for honest consumers. Nepra’s latest State of the Industry report shows that distribution companies lost over 19.17bn units — or 16.4pc of the units purchased from gencos in 2022-23 — due to T&D losses and theft. A big portion of the cost of these stolen or lost units is passed on to bill-paying consumers, or the government’s budget, or becomes part of the circular debt to be paid by future generations.

From what the minister said in his interview, it is clear that the authorities are well aware of the extent of the problem and its consequences for the economy and bill-paying consumers. Political rhetoric aside, the situation begs the question as to what exactly has been done or is being done to put an end to electricity theft, apart from minimising the losses through punitive load-shedding. The outcome of a campaign against power thieves launched in September last year has proved to be disappointing. Even the involvement of the FIA in this drive in March has not produced any tangible results. There is not a single high-loss feeder line, let alone a grid station under any distribution company, where the authorities can claim to have significantly stopped power theft. Even the solution to the issue discussed by the minister during the interview pertained to making punitive blackouts more targeted. The twin objectives of reliable provision of electricity at affordable rates, as well as the liquidation of the circular debt, cannot be achieved without wiping out the menace of power theft and controlling T&D losses. Punitive actions can help only so much.

Published in Dawn, June 25th, 2024

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