LAHORE: The federal government’s announcement and instructions to reduce loadshedding hours on several high-loss feeders has worsened the financial condition of the Peshawar Electric Supply Company (Pesco), as the company continues to face Rs5 billion monthly losses for the last two months.

The reduction in loadshedding hours caused a massive increase in the company’s line losses, which were 31.4 per cent in December 2016 and 46.5pc in December 2017 and onward, according to documents. And interestingly, the Ministry of Energy removed the top boss of the company for ‘not reducing the line losses’ despite the fact that the ousted official had already informed the Pakistan Electric Power Company (Pepco)—a subsidiary of the Power Division—against it.

“If the orders to reduce loadshedding hours continue to be implemented, then Pesco looks to be no more in the future,” fears an official source in the government. “Increased loadshedding on high-loss feeders is the government’s own policy that is widely known to everyone. So the government itself is violating this and now has left the company on the verge of destruction,” the official deplored.

According to a letter, the company had informed Pepco in advance about the consequences of the decision. “It is brought into your kind notice that Pesco is facing huge financial losses since many years and cannot fully return the bills of Central Power Purchase Agency (CPPA) incurred so far. Now, the load-shedding has been decreased as per the schedule of Dec 2, 2017. Previously in high-loss areas, Pesco was supplying 4-6 hours electricity with intervals, but now the Power Information Technology Company (PITC) has allowed electricity flow of 14-16 hours on high-loss feeders as per instructions of the Federal Minister (Power Division),” explains a letter by the company to Pesco on Dec 5, 2017 with reference to the minister’s press conference of Dec 3, 2017 in this regard.

Through its letter, the company termed the decision ‘a serious financial impact’ on it to the tune of Rs5bn losses per month due to the reduction of loadshedding. It also appended with the letter details of load-shedding schedule for December 2016 and 2017 comparison along with the financial consequences. It also provided specifics of load with different formulas/calculations on the feeders above 50pc line losses.

“It is further added that Pesco is putting its best efforts to reduce the losses and increase the recoveries. The areas which are attached with FATA like Shabqadar, Charsadda, Frontier (FR) Peshawar, FR Kohat, Bannu, Tank, Karaka and Hangu are not paying even a single penny for the use of electricity. And now, they will be enjoying full electricity,” the letter reads.

Additionally, it revealed that the police in KP was not cooperating with Pesco to control line losses despite the establishment of three police stations in Charsadda, Peshawar and Bannu regions but the results are not satisfactory. Due to the law and order situation in KP, Nepra has also allowed losses up to 31.95pc to Pesco. The letter claims to have controlled overbilling, following the directions of the minister. “It is therefore requested to review the load-shedding schedule so as to reduce the negative financial impact on Pesco and save it from further losses,” it concludes.

It may be mentioned that besides Pesco, Lahore Electric Supply Company also faced an increase in line losses from 12.6pc in the second half of 2016 to 13.4pc in the corresponding period of 2017 after the ministry allegedly ordered it to make large-scale bill adjustments in 2017 against the overbilling of past many years (2009 onwards). The factor of increased percentage of line losses in 2017 due to bills adjustments for the previous years’ overbilling also put the senior officials, who implemented the government orders, in trouble as the company officials faced removal, transfers, inquiries and other punishments.

Published in Dawn, February 17th, 2018