The government has decided to initiate a survey of electricity consumers to address issues of power theft, line losses, power companies’ losses and circular debt.

According to sources in the ministry of finance, power distribution companies will conduct the survey, which is part of a broader strategy chalked out by the Asian Development Bank, the World Bank and the Planning Commission to tackle the energy crisis.

A survey for the Islamabad Electric Supply Company (IESCO) has already been finalised as part of a pilot project. Feedback from the project will be funnelled into finalising the survey for power distribution companies.

The survey is expected to discover the amount of electricity consumed by each consumer, the number of commercial, industrial and residential consumers in each distribution company’s vicinity, the amount of electricity consumed by public institutions and the amount of defaulters in each category.

According to the current project, the size of electricity bills will also be reduced. In the IESCO pilot project, bills are expected to be reduced in size by 20 to 25 per cent. The project will also collect data on consumers by partnering with the National Database Registration Authority (Nadra). Proposals to bill consumers through email and text messaging are also under consideration.

From Tribune

An interesting report from DAWN summaries the Asian Development Bank report which holds the Ministry of Water and Power and NEPRA (National Electric Power Regulatory Authority) responsible for power crises the country faces.

The Asian Development Bank has held two major power sector stakeholders — the Ministry of Water and Power and the National Electric Power Regulatory Authority (Nepra) — responsible for most of the ills Pakistan’s power sector is facing today, including loadshedding, system losses and high tariffs.
This puts a serious question mark on the performance of the two public sector institutions designed and set up to solve electricity problems and remove consumers’ sufferings. They have been blamed for stalling or delaying reforms launched by the government more than two decades ago.

In its “Technical Assistance Completion Report” on creation of Central Power Purchasing Agency (CPPA), the ADB said there had been setbacks to its technical assistance because of lax attitude of Pakistan authorities; it provided another opportunity to the lender to sell another technical assistance for strengthening the regulatory regime.

Because of delays in obtaining internal approval within the government, several milestones, including the establishment of CPPA, could not be achieved. “There were significant delays encountered i.e. converting the market rules guidelines into formal statutes; the incorporation/registration of CPPA and finalisation of its budget; and the nomination of its chief executive officer and senior management. The CEO still remains to be appointed by government after nearly 18 months of its inception,” ADB’s principal energy specialist F.C. Kawawaki said on Monday.

“The weak capacity of Nepra to formulate market rules delayed the implementation process and the ADB was requested to process a follow-up technical assistance to help Nepra in developing market rules,” he added.

Since 1998, the government has been implementing a strategic power sector restructuring and unbundling plan to end the persistent power crisis through increased investments to address longstanding fiscal, technical and fiscal deficits.

The ADB report said that the reforms process had been slow and power supply and infrastructure requirements did not keep pace with the rising demand, thereby constraining growth potential and the country’s competitiveness.

“The current generation shortfall is close to 40 per cent of the installed capacity and coupled with the overstressed power infrastructure results in eight to 10 hours of forced power outages. The inter-circular debt to the tune of Rs250 billion, which is nearly 40 per cent of the sector’s annual revenues, accentuates the situation,” it said.

The CPPA is a key organisation to look after contractual obligation between the government and power producers and between the producers and purchasers.

Although the power sector in Pakistan is mature enough to graduate towards formation of an independent CPPA, “a lack of thrust in political will impeded its implementation in true spirit”. Although consultants have submitted deliverables within agreed timeframes, “the weak capacity of the executing agency and political will of the water and power ministry have stalled the full establishment and operations of the CPPA”.

The ADB said that a lot apparently had been contingent in resolving major structural, technical, fiscal and governance gaps and implementing reform agenda on the part of the government: Nepra’s capacity to initiate the policy reforms that could convert the guidelines on market rules for electricity trading into formal industry regulations and solve circular debt problems had been marginal.

It said the government was also not ready to institutionalise the CPPA model because of exogenous factors like severe power shortages and emergency of ballooning circular debt.

“The creation of an effective CPPA without addressing or restructuring the past financial and fiscal deficits of the sector as well as without providing adequate safety valves to avoid such future recurrences has not been an effective exercise,” the bank said, adding that prior to CPPA creation, the government should have laid emphasis on resolving systemic, structural and fiscal constraints in the sector that had led to circular debt.

On its part, the ADB has learnt the lesson that experiences in one market cannot be directly replicated into another. A thorough plan based on ground realities is critical for success of any new institutional arrangement, particularly of the already challenged power sector.

The report said the ADB should not allow its international consultants to avoid travelling to Pakistan on security excuses.

For the electricity traiffs the limit is beyond the skys. What new comes in is differentiated power tariff to be implemented from September 1. The Tribune gives the details:

The federal government has introduced differentiated tariffs for electricity consumers, to be implemented on bills sent after September 1.

Based on time-of-use metering, the move would translate into a reduction from 4 paisa to 48 paisa per kilowatt hour (p/kWh) for different consumer categories.

According to a notification, the current tariffs will be maintained for peak hours while the reduction will be applicable on off-peak hours for residential, commercial, industrial and bulk users.

The reductions in off-peak tariffs are as follows: 48 paisa per kWh for residential, 24 paisa per kWh for commercial, 10 paisa per kWh for B1 and 24 paisa per kWh for B2 industrial consumers. For bulk consumers, the reduction is four paisa per kWh and 14 paisa per kWh for C-1B and C-1C categories respectively. For street lighting, the reduction is 29 paisa per kWh.

Will this reduction matter much for the consumers?

The National Electric Power Regulatory Authority (Nepra) allowed on Tuesday a 26 paisa per unit increase in power tariff for consumers of nine distribution companies of Wapda from August 31 on account of monthly fuel cost adjustment.

A Nepra official told Dawn that power companies had sought an increase of 52 paisa per unit under the fuel adjustment formula for July.

But the power regulator allowed an increase 26 paisa and turned down the rest sought on account of system losses, late payments and overall circular debt.

The official said that Nepra had sent its determination to the federal government for notification. The new tariff will be recovered from consumers in the next billing month. The new tariff will not apply to KESC whose fuel-based tariff adjustment will be made separately.

With the latest increase, the tariff will see a cumulative surge of about Rs1.76 per unit in three months — May, June and July — raising the total per unit cost to about Rs4 per unit.

Last month, Nepra allowed a 64 paisa per unit increase and in June the government separately increased base tariff for all consumers, including KESC, by 7.6 per cent or 50 paisa per unit under an agreement with the IMF. Separately, Nepra increased 52 paisa per unit as monthly fuel cost adjustment for June.

Since March last year the government has increased tariff by about 80 per cent.

via DAWN.COM

Pakistan Ministry of Water and Power would provide electricity to around 100 villages through solar energy during this year as part of its programme to ensure light in every village of the country. Electrification through Renewable Energy Technologies in remote and off-grid villages of country is the prime focus of the government which has initiated projects not only to overcome power shortage but also to electrify the remotest parts, said an official at the Ministry.

The official said a project has already been approved to electrify 400 remote villages of Sindh and Balochistan through solar energy. Around 49 villages (3000 households) have been electrified in district Tharparker using solar energy through government own funds.

The funds for remaining work in Sindh and the projects in Balochistan are being negotiated with the donors and are expected to be initiated during this year. Moreover, 100 Solar Home Systems in three villages of district Dera Bugti, 119 Solar Home Systems in 10 villages of Deh Tiko Baran district Jamshoro, Sindh and 200 Solar Home Systems in 16 Villages of district Khuzdar, Balochistan are also being installed through which thousands of people would be facilitated.

The official said in view of the electricity crises in the country the government has given a serious thought to both short and long-term measures. Public sector hydro plants with generation capacity of 347 MW will be added to the system at a cost of US $500 million and 1,700 MW of high efficiency public sector thermal generation would start generation between end 2010 and upto 2012. The outlay for these projects is estimated as US $1.5 billion.

The official further informed that Wapda has been assigned construction of 32 small and medium dams in four provinces and Fata. The plan will be implemented in two phases as in first phase (2009-2013) 12 dams and in second phase 20 dams will be constructed during the period 2010-2014.

A dam across Sirran River is also included in second phase of the plan, the official said and added the engineering study of Sirran Dam in district Mansehra (NWFP) on Sirran River will be initiated during this year. When asked whether there is any proposal to get 1100 Megawatt electricity from Iran to control power crisis, the official said two possible projects of electricity imports are being processed.

Giving details, the official said import of 100 MW power from Iran for Gwadar which includes construction of a 220 KV Grid Station at Gwadar and 75 km associated 220 KV double circuit Transmission Line from Pak-Iran Border to Gwadar. The project is intended to be financed by Export Development Bank of Iran (EDBI) for which negotiation with the Bank is in progress.

The Project is expected to be completed by year 2011. The other project is import of 1000 MW power from Iran for the National Grid. The final report along with the detailed financial analysis based on techno-economic studies and the implementation plan for the project will be submitted by the consultants soon. Further action could be taken depending upon the outcome of the feasibility study and arrangement for the financing of project.

The project may take 4-5 years from commencement of the project implementation activities. This is envisaged to take care of a substantial level of demand of Balochistan and the South-East of Pakistan. Moreover, construction work on new dams is expected to be started during the next two years, which included Diamer Basha Dam, Kurm Tangi Dam Project and Munda Dam.

Giving province wise names of the small and medium dam projects where construction work is expected to be started during next two years, the official said in Balochistan they are Hingol Dam, Naulong Dam, Winder Dam, Garuk Dam and Pelar Dam. In Sindh they are Nai Gaj Dam, Darwat Dam and Sita Dam, in NWFP Bara Dam and Daraban Zam Dam and in Punjab they are Ghabir Dam and Papin Dam.

South Africa’s power supplier Eskom Holdings Ltd. generates nearly all the nation’s electricity at some of the world’s cheapest rates. That arrangement has allowed global mining giants to extract vast amounts of gold, platinum and coal from South Africa’s earth and to keep electricity affordable for the poor.

But the state-run utility says artificially low electricity rates have left it with dangerously low generating capacity, leaving the country vulnerable to power cuts.

It is proposing raising tariffs 35% annually in each of the next three years—current and former Eskom executives warn anything less will threaten the company’s ability to provide a steady supply of electricity.

The proposal has brought a barrage of criticism from politicians and consumers, fanning concerns about inflation and imperiling the recovery of Africa’s biggest economy. On Wednesday, government regulators are set to decide on its rate-increase proposal.

Via: WSJ

One of the trends for saving energy is that of energy monitoring at home or work. Companies are planning to launch wireless energy dashboards that will sit in your home, monitor energy data from your electricity meter and let you know if you’re being an energy hog. As reported by Earth2Tech:

While tech firms have been trying to sell you on the “digital home” for years — complete with wireless networks that can do everything from control your entertainment equipment to operate high-tech security systems to roast a chicken — the new energy management firms are keeping it simple by using low-cost hardware and open standards to monitor energy data.

This year is particularly important to these mostly young companies, as President Obama has pledged to help utilities install 40 million more smart meters (basically digital meters that create a 2-way connection with the power grid and the utility). Smart meters installed at homes can unleash data about the fluctuating price of electricity throughout the day, enabling consumers that have energy management tools to shift energy consumption to the time of day when power is cheapest. For utilities, that can mean better management of the power grid and eliminate the need to build out expensive power generating systems.

A half-dozen companies are launching their first energy dashboards this year, and a few others are starting to gain traction with already available online tools. One of the biggest differences between these firms is whether companies will sell directly to the consumer or to utility partners for upcoming smart meter rollouts. Several of the already-available options for consumers bypass smart meters and utilities and just help the interested consumer with a standard electricity meter. They’re cheap and available online, but they provide less detailed data.

Karachi Electric Supply Company (KESC) recently inaugurated its new 220 MW (megawatt) Combined Cycle Power Plant located in Korangi. The plant, owned and operated by the KESC, has been completed with an investment of Rs 16 billion. It consists of four latest, state-of-the-art high-efficiency gas turbines, one steam turbine and other plant equipmentNote that Abraj Capital assumed management control of KESC in late 2008. The current deficit of electricity in the system stands at around 3,500 megawatts. The KESC has started pre-construction activities for a new 560 megawatts combined cycle power plant at Bin Qasim which would be functional in one and half year

All the big shots, Prime Minister,  Sindh Governor Dr Ishratul Ebad Khan, Chief Minister Qaim Ali Shah, Education Minister Mazharul Haq and others were also present on this occasion. The Prime Minister said that a mix of moderate generation capacity projects like Duber Khwar, Jinnah Low Head Mianwali, Nandipur, 3 Chashnupp, 121 Mega Watts Allai Khwar, Bhikki Power Plant and Liberty Power Tech are some of the prominent power projects in thermal, nuclear and hydro sectors.

Prime Minister said that theft of electricity and non-payment of dues are the biggest reasons of bringing this sector under crisis. “It is a vicious cycle which affects investment in the system and needs to be broken through building better coordination among all stakeholders in the city of Karachi,” he added.

“During the calendar year 2009, we ensured commercial operations of Attock, Atlas and Nishat power generation plants adding 581 megawatts to our national grid”, the PM said, adding that the Cabinet in its meeting of 27th January, 2010 had approved eight RPPs of 1156 megawatts which are at advance stages of implementation and are being keenly pursued for attaining commercial operations within the existing calendar year.

He said he hoped that when the new IPPs and RPPs would become operational and add 1737 megawatts of power to the national grid, it would provide considerable relief to the people of Pakistan. He urged the KESC to become a role model, attracting more investment in power sector and further enhance its generation capacity to meet the power demand of Karachi city.

He said that the current deficit of electricity in the system stands at around 3,500 megawatts. “We are working on a fast track basis to get the required power deficit bridged and today’s occasion is a proof of the fulfilment of our promise to the people of Pakistan”, he added.

The KESC has started pre-construction activities for a new 560 megawatts combined cycle power plant at Bin Qasim which would be functional in one and half year, he said, and added that Karachi which was famous for being city of lights would be free from load shedding when this project becomes operational.

He said that the scope of the government’s economic management should be focused on implementation of such policies which catalyse the economic activities of the private sector. The government alone cannot take upon itself the responsibility of economic development. “We believe in private sector resource mobilisation, which is evident from the 1994 Power Policy, and the subsequent policies, that have primarily evolved around this policy”, he added.

“We all are aware that the mere opening up of the economy is not sufficient to attract foreign investors unless the policy framework is fully supported by institutional arrangements. We have to further transform the investment culture, both at the official and the private level so that it is not only investor-friendly but perceived as such”, he said.

He suggested that KESC may enhance its partnership potential with PPIB, Pepco, Wapda, Aedb and Nepra to attain optimum generation capacity which finally does not require Pepco to supply power to KESC. He congratulated the KESC management and Abraaj Group on launching the combined cycle power plant and said that he would urge them to continue further investment in Pakistan.

Minister for Water and Power Pervaiz Ashraf said that the government is committed to resolve the issue of shortage of power in the country. He appreciated the management of KESC for setting up new power generation plants that would help to overcome this serious issue.

CEO of KESC Tabish Gauhar said that KESC is one of the world’s largest integrated utility companies, responsible for generation, transmission and distribution of electricity to 2.2 million customers spread over an area of 6500 square kilometres covering the entire city of Karachi (with 18 million people) and stretching all the way to Uthal, Bela and Vinder in Balochistan and Gadap and Gharo in Sindh. It was incorporated nearly 100 years ago in 1913 and was privatised in November 2005.

He said that over last 18 months a record equity of $280 million had gone into KESC, including $206 million from Abraj Capital and the rest from the government of Pakistan proportionate to its 25.5 percent stake in the company. Another $220 million of equity will be injected over the next couple of years, taking the total to $500 million over a period of 3 years.

Abraj Capital assumed management control of KESC in late 2008. He said that over the last 18 months, 450 MW of additional generation capacity had been added to the network (including this 220 MW Korangi Power Plant). Another 560 MW Power Plant is under construction at Bin Qasim to be commissioned by 2012 and at least 3 MoUs worth 1000MW have been signed for coal based power plants, including one using indigenous coal from Thar.

He said on the transmission 6 new grid stations have been added to the network and another 3 are expected to be energised before the year-end. “In distribution, we have completed the first two phases of the 4-phase model town project to augment and strengthen our LT network by adding 500 new PMTs, 140 new feeders etc by the summer of this year”, he said, and added: “We have also upgraded our call centre to 350 agents, launched a series of new integrated business centres to provide one-stop solution to our customers, and also initiated a system of weekly Open Kutcharies for our customers across the 18 towns of Karachi”.

He said that over the past several months the KESC has been able to provide uninterrupted power to the major industrial zones of Karachi such as Korangi and Site and to various sensitive installations such as the Karachi Water and Sewerage Board, whilst following a fixed three hours load shedding schedule for the residential and commercial customers on working days (except on Sundays and public holidays when there is no load shedding at all).

“Due to widespread theft of power and non-payment of electricity bills, we are simply unable to provide power and best in-class service to all our customers”, he said, and added that the actions and inactions of the significant minority adversely affect the vast majority of the customers who are law abiding and pay their bills on time, in the form of load shedding and breakdowns.

He said that affordability is another issue for low salaried class and requested the government to seriously think about the pace at which tariff subsidies are being withdrawn and to also revisit the pricing regime for furnace oil, which has increased from Rs 5000/ton to Rs 50,000/ton over 10 years and natural gas, which has increased nearly 4 times over the some period.

Likewise, the issue of Circular Debt plaguing the entire energy sector is affecting them, too. “We have over Rs 50 billon in receivables from various government and public sector entities and, in turn, approximately Rs 35 billion in current dues to various suppliers including Wapda and SSGC.

The issue needs to be resolved as a matter of priority. He said that over the last 18 months, it had paid over Rs 100 billion to various suppliers including Wapda, SSGC, PSO, Gul Ahmed, Tapal, and Kannup. He said that gas supply is another major concern, as the KESC received at least 40 percent less gas than committed in this winter. “We will require an additional 130-150 mmcfd of gas for the new 560 mw power plant due to be commissioned in 2012″, he said.

The minister for water and power Pakistan said the cabinet decided to adopt all the 11 recommendations of the ADB that took about five months to complete its third part audit of the rental power projects. He said the electricity rates would go up by 6.1 per cent if eight RPPs of 1,156MW were implemented as advised by the ADB, but the increase could go up to 9.9 per cent if 14 RPPs of 1,994MW were realised. He, however, agreed that the increase did not take into account the impact of oil that was a pass-through item and its prices could not be estimated.

He said the ADB had also asked the government to remove inconsistencies in RPP contracts if legally possible, to strictly enforce contract timelines and to get their commercial operations certified by internationally acceptable independent engineers.

The ADB had said that the elimination of 100 per cent loadshedding during peak hours was not a viable option from the affordability perspective, he said. The bank had also called for quality controls of old and used RPPs strictly under the trade policy, optimum utilisation of available gas and find new resources aggressively and must continuously run RPPs till 2012 to provide room for improvement in Wapda’s generation plants, he added.

During the current winter season, traders are dispatching bulk of their import of generators to Punjab where power outages, spanning from 15 to 18 hours has pushed its sales to substantial level. The demand for generators in the retail and wholesale markets of Karachi have plunged to more than 70 to 75 percent during the last few months.

The traders attributed decline in demand to short duration of load shedding and declining purchasing power of city general consumers.

“Poor response by people of Karachi during the current winter season towards purchasing generators have spelled gloomy business prospects for the traders majority of which have turned their attention to Punjab to get rid of the stuck up stocks” Khurrum Saigal, president Pakistan Machinery Merchant Group (PMMG) said.

He said poor sales of all kinds of generators available in the market was reported by most of the traders ranging from one kv of Chinese origin Lifan to 2 kv of Meiji company.

Referring to the overwhelming response of Punjab market regarding boost in sales of generators, he said the positive business opportunities have compelled large number of Karachi traders to market and dispose of their products before end of the winter season thus enabling them to place new import orders before start of the next summer season.

Traders and importers claimed during corresponding period of previous year, generator sales in both retail and wholesale markets was encouraging as substantial number of buyers purchased different brands of generators.

The traders are facing bleak prospects at one of the largest wholesale generator market in country at Shahra e Liaquat Karachi as sales of imported generators from China, are preferring to sale their stuck up imported generators in the vast Punjab market, where prolonged load-shedding hours have turned lives of people miserable.