The National Electric Power Regulatory Authority, Nepra, has accused K-Electric of violating conditions of its privatization agreement. According to the agreement, K-Electric was required to add 1,000 megawatts of electricity to its capacity within three years, but it had failed to do so. It did add 1,034 megawatts to its capacity, but closed old plants that were generating 635 megawatts of electricity. This resulted in a net addition of only 349 megawatts.
The violations were discovered by Nepra’s investigation team investigating the excessive load shedding in Karachi during the first week of Ramadan. Some areas of Karachi faced load-shedding of up to 96 hours which resulted in deaths of more than 1,300 people. The investigative team found out that K-Electric was utilizing all the electricity it was receiving from the national grid, but was only utilizing 50% of electricity generated from its de-rated generators. According to Nepra, K-Electric has other generators which can produce more electricity than the de-rated generators, but it wasn’t utilizing them.
Nepra claims that K-Electric usually supplies 2,200 megawatts of electricity to Karachi, but as the demand for electricity increased to 3,100 megawatts, its feeders and transformers started tripping when production reached 2,700 megawatts of electricity. This resulted in excessive load shedding as supply to 350,000 consumers was affected.
The investigating team also discovered that K-Electric had mismanaged government funds. Government had provided Rs 13 billion to K-Electric, out of which Rs 6 billion were to spent on its transmission line, Rs 3 billion on supervisory control, and Rs 4 billion to upgrade its distribution system. However, the company didn’t invest in the transmission line or distribution system, and its management didn’t cooperate with the investigating team to account about how the Rs 10 billion were spent.
Nepra will be initiating regulatory proceedings against K-Electric and will send a show cause notice next week. It might even fine K-Electric Rs 100 million or appoint an administrator to takeover the company and improve its operations.