ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) on Tuesday completed hearing process on K-Electric’s petition for grant of non-exclusive distribution license and supplier license for the next 20 years.
KE, in its petition submitted to the NEPRA, requested for grant of non-exclusive distribution license and supplier license for the next 20 years to its service territory including Karachi, Dhabeji, Gharo in Sindh and Balochistan’s Hub, Bela and Vinder regions. NEPRA completed the hearing process and will issue a detailed decision on the plea later after necessary scrutiny of the data and facts.
The hearing was attended by various stakeholders including Karachi’s industries and the general public. KE’s senior leadership including Chief Financial Officer Aamir Ghaziani, Chief Distribution Officer Fawad Gilani, and Chief Marketing and Communications Officer Sadia Dada, represented the company to address the questions framed by the regulator.
Speaking about the expectations and results of privatization, KE shared that a capital expenditure of around PKR 544 billion (USD 4.4 Billion) has been made towards improving the power supply towards Karachi. This has resulted in an addition of 1,957 MW of generation capacity and 12 percentage points improvement in fleet efficiency from 30% in 2005 to 42% in 2023. Since the most efficient 900 MW RLNG plant was commissioned in the last quarter of FY 2023, the fleet efficiency would increase to 49% when the said power plant would operate for the entire year. The KE leadership shared that since privatization, transmission and distribution system capacity has been doubled with a drastic reduction in line losses.
Most of the conversation revolved around the tariff and seeking tariff benefits for industries based in Karachi. Other participants expressed satisfaction with the network and associated services while some suggested improved strategies.
In response to questions about improving reliability of services, the company highlighted that it has invested in IT and tech-based interventions to modernize the infrastructure and improve service delivery. These include pioneering initiatives such as the use of Geographical Information System (GIS) and deployment of 60,000 smart meters enabling greater visibility over power consumption trends.
Aamir Ghaziani, KE’s CFO stated, “We remain committed to providing customers with the best quality of services. Our PKR 484 billion upcoming investment plan, and proposed addition of over 1,200 MW renewable energy are indicative of this. We are determined to continue the same performance in the future as well”.
Speaking on the occasion, NEPRA officials said that KE’s 20-year license had expired earlier and NEPRA granted KE an interim distribution license for six months which will also expire in January.
Stakeholders were asked for views on K-Electric license renewal and the views of most of the stakeholders have come against the renewal of electric distribution licenses of KE, said NEPRA officials.
Tanveer Ahmed Barry of Karachi Chamber of Commerce and Industry (KCCI) asked to close expensive plants of KE while Karachi is a big city and more than one company should be given the license.
Another KE consumer said losses of K-Electric are higher than those of other electricity companies and the reason shared by the KE are not correct.
Korangi Associates demanded from the NEPRA to take steps to make electricity cheaper as industry has been shutting down.
Usman Ali an intervenor said that loadshedding should be based on PMT wise and feeders should not be shut down where the losses were high.
Some other invtervenors said that there were billing issues that should be resolved.
Imran Shahid representing Jamaat-e-Islami said that KE is generating expensive electricity that had burdened the consumers.
He said that there was a commitment at a time of privitisation of the power utility that there would no subsidy involved in future.
But there is still subsidy involved that is burden on the national exchequer,” he said.
He also alleged NEPRA for not releasing industry report so far that made the intervenors unable to analyse the performance of the power sector.
K-Electric (KE) is a public listed company incorporated in Pakistan in 1913 as KESC. Privatized in 2005, KE is the only vertically integrated utility in Pakistan supplying electricity within a 6,500 square kilometers territory including Karachi and its adjoining areas. The majority shares (66.4%) of the company are listed in the PSX owned by KES Power, a consortium of investors including Aljomaih Power Limited of Saudi Arabia, National Industries Group (Holding), Kuwait, and the Infrastructure and Growth Capital Fund (IGCF). The Government of Pakistan is also a minority shareholder (24.36%) in the company.
