K-Electric told to explain blackouts

The show-cause notice was issued under Sections 28 and 29 of the 1997 Nepra Act and was filled with accusatory language, which suggested that the objective of the notice was populist action rather than abiding by a legal proceeding. K-Electric has been given 15 days to respond.

The Nawaz administration has had a dispute with K-Electric almost since the day they came into office in May 2013. The government was unhappy about the agreement between Karachi’s utility company and the state-owned National Transmission and Dispatch Company (NTDC), under which K-Electric buys 650 megawatts of electricity from the state-owned grid rather than running its own power plants.

The Nawaz administration believes this practice of K-Electric is unjustified and that the 650MW would go a long way towards reducing power outages in other parts of the country. K-Electric justifies its practice by saying that the state-owned Sui Southern Gas Company does not fulfill its obligations in providing the utility with enough natural gas, as a result of which it must keep some of its power plants offline or else run them on expensive furnace oil. The government itself keeps several state-owned power plants with a combined capacity of more than 6,000MW offline for this very reason.

The show-cause notice mentions K-Electric’s decision to keep those power plants offline and also goes on to accuse K-Electric of “failure to provide nondiscriminatory distribution services”, a reference to K-Electric’s policy of exempting areas of low electricity theft from power outages.

That policy has allowed K-Electric to become the only utility in the country to introduce an active disincentive against theft, and allowed the company to reduce its line losses from over 40% prior to privatisation to 24.1% as of March 2015.

Nepra also said that K-Electric “failed to provide vital information” despite the fact that K-Electric is the only utility company in South Asia to provide regular updates to consumers.

Nepra also mentioned the fact-finding committee that had visited Karachi earlier this year to find out why power outages had increased. That committee exonerated K-Electric’s power generation policies, though it did say that K-Electric had failed to invest in its transmission infrastructure.