Receivables of XWDiscos, KE jump to record high of Rs1.68 trillion in 2021-22

The Nation  |  Oct 01, 2022

ISLAMABAD - The government exchequer and the end electricity consumers had been burdened with an additional Rs1.4 trillion on account of capacity payments, T&D losses, underutilization of efficient power plants, fuel shortage etc during FY2021-22.

The receivables of the Ex-WAPDA Distribution Companies (XWDiscos) and KE have also surged to record high of Rs1.680 trillion during 2021-22, said NEPRA State of the Industry Report (SIR) 2021-22 released here Friday.

According the report, the performance in each segment of the electric power services i.e. generation, transmission, distribution, and supply is highly questionable. To turn around the situation, it is required to undertake emergent actions including improving the performance of the public sector DISCOs by privatization or outsourcing their operations and maintenance in public-private participation. Further, involving provinces with clear responsibility may also improve the issue of recoveries of electricity dues and lower the theft of electricity, the report recommended.

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The installed capacity of CPPA-G system is 40,813 MW out of which 23,821 MW is thermal (GENCOs, IPPs, SPPs), 10,635 MW hydroelectric, 1,838 MW wind, 530 MW solar, 369 MW bagasse and 3,620 MW nuclear. The installed capacity of KE’s own generation is 2,345 MW. 

As per the NEPRA’s SIR, both the capacity payments and receivables to the IPPs have surged by Rs107b and Rs. 282.232b respectively during FY2021-22. The receivable amount of DISCOs including KE was around Rs. 1.398 trillion in 2020-21, which has reached to Rs. 1.680 trillion during 2021-22, showing an increase of Rs. 282.232b, said the report.

The capacity payments to the Independent Power Producer (IPPs) have increased by Rs107b to Rs 721b in 2021-22 from Rs614b during the previous year, said SIR. 

During the FY 2021-22, the allowed T&D losses for the DISCOs were 13.41pc whereas actual losses were 17.13pc. Due to the difference of 3.72pc, the financial loss on this account has been worked out around Rs. 113b. In addition, NEPRA determines the revenue requirement on 100pc receivables. During the FY 2021-22 the receivable amount in terms of percentage was around 90.51pc thus incurring the loss of Rs. 230b of the billed amounts. The overall impact on account of additional T&D losses and less recovery works out as Rs. 343b. As of June 30,2022, the circular debt stood at Rs. 2.253 trillion as against Rs. 2.280 trillion during FY 2020-21, thus decreasing the amount of Rs. 300 million during the year. Besides losses, recoveries, underutilization of the assets, running defaulters, and delays in payment of subsidies are among the contributory factors towards circular debt.

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The capacity payments of PMLTC during the period September 1,2021, to June 30,2022, was Rs. 49b while total electrons transmitted through this line during same period was 11,560 GWh with utilization factor of around 36pc which is quite low as compared to which was envisaged.

The end power consumers were burdened with an additional approximately Rs 97b on account of operation of Combined Cycle Power Plants (CCPP) in open cycle mode and PLAC Part Load Adjustment Charges (PLAC) during 2021-22. It is noted that the dedicated cheap price local gas based CCPP Guddu was either not operated or operated in open cycle mode which has resulted a loss of more than Rs. 55 billion during FY 2021-22. 

System constraints and operation of inefficient power plants due to unavailability of LNG has resulted an additional financial burden of more than Rs. 23b on the power consumers during 2021-22. Due to the unavailability of the RLNG, comparatively inefficient power plants have been operated having a financial impact of Rs. 19.332b.The financial impact of plant operations in violation of EMO due to transmission constraints has been calculated as Rs. 3.670b.

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The PMLTC has been allowed 4.3% T&T losses. The actual T&T losses reported by PMLTC on 660 kV HVDC Line for the FY 2021-22 are 2.87pc with lost units of 341.43 GWh having a cost of around Rs. 2.721b. Therefore the optimum utilization of the power plants needs to be required in order to maximize the benefits of the transmission line.

The loadshedding based on A&TC losses is observed in many DISCOs including PESCO, QESCO, HESCO and SEPCO. The criteria for AT&C losses as defined is the feeder which has a minimum of 20% and larger AT&C losses. The inefficiency of DISCOs due to higher T&D losses and less recovery does not permit them to enforce AT&C loss-based loadshedding. It has been further observed that due to the loadshedding the recovery of the capacity charges from the respective feeders is also lost which is another issue for the power sector. In addition to the above forced loadshedding for avoiding costlier generation has been observed in the DISCOs. Even in IESCO, LESCO, GEPCO, MEPCO and FESCO regions, forced loadshedding has been incurred thus underutilizing the available capacity for which capacity charges are paid to the generation companies. 

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The loadshedding enforced by the DISCOs is hurting the power sector in many ways i.e. the available generation capacity remains under-utilized for which the capacity charges are being paid, the RE power plants are paid for NPMV and the thermal power plants are operated on part load, due to which PLAC and compensation for degradation are being paid; the transmission capacity is underutilized resulting in an increase in transmission use charge to compensate for its required liquidity; at the DISCOs end, the demand is not served as projected, and the desired sales growth is not achieved, which result in increasing the distribution margin to ensure availability of required finances. This all contributed to increasing the consumer end tariff. 

According the report, the total pending connections in 2021-22 were 176,829 with a cumulative load of 1,215 MW. The pending connections together with the loadshedding are the main reasons for lesser utilization (i.e. 43%) of the installed generation capacity of 43,775 MW. It has been observed that DISCOs are unable to implement the SOPs regarding safety measures due to which 196 fatal accidents have occurred during FY 2021-22 against 189 fatal accidents recorded during FY 2020-21. The overall sales of DISCOs and KE increased by around 7pc in 2021-22 compared to the sales of previous year. Due to higher electricity tariff the amount in respect of free electricity being provided is steeply increasing which during the year FY 2021- 22 reached around Rs. 6.4bn excluding WAPDA employees.

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