KE’s Power Pledge: 95% of Karachi to be Load Shedding Free in 7 Years

The management of K-Electric (KE) has submitted a plan to the power regulator ensuring to make 95% of Karachi to be load shedding free in the next seven years.

The plan involves an investment of Rs484 billion to improve its network during the same period.

The company also aims to reduce transmission and distribution losses to 12.8 percent by 2030 through its investment plan.

Since privatization, KE has reduced its T&D losses from 34.2 percent to 15.3% in 2022, surpassing NEPRA’s benchmark for the year. Inflation, Rising Electricity costs hurt KE Profitability

During a public hearing held on Wednesday, KE management informed the National Electric Power Regulatory Authority (NEPRA) that the company aims to take the city’s loadshed exemption percentage from 75% in 2022 to 95% by 2030.

NEPRA held a lengthy hearing to discuss KE’s investment plan in transmission and distribution for the seven-year period from FY24 to FY30.

The hearing was attended by a large audience, including industries, the financial sector, and senior community activists, both in person and online. KE has filed separate tariff petitions for its generation, transmission, distribution, and supply business.

The CEO of KE, Moonis Alvi, said during the hearing that the investment plan was being conceived to maintain a balance between affordability, availability, and sustainability of power supply, which is considered the trilemma of today’s power sector.

He further said that the investment plan is being developed to embrace competition and maintain a balance between affordability, availability, and sustainability of power supply.

NEPRA inquired about KE’s future plans to address challenges such as loadshedding and theft. KE shared details of its investment and projects being undertaken to reduce losses in the system and provide a stable power supply to a growing number of customers.

Several intervenors inquired about KE’s plan to add generation to meet Karachi’s future demand.

While NEPRA clarified that the hearing was on transmission and distribution specifically, documents on KE’s website show salient features of their combined investment plan, which includes renewable energy addition of 1182 MW.

In its investment plan for the next seven years, KE aims to invest Rs484 billion, with 177.85 billion to be invested on account of growth and expansion, while Rs99.41 billion will be invested for interconnection and N-1 contingency.

An amount of around 67.83 billion will be invested for loss reduction, and Rs64 billion will be invested for maintenance, 29 billion for safety, Rs26.21 billion for technological advancements, and Rs18.51 billion for IT & Cybersecurity.

The public accident prevention program is a key feature to ensure continued safety through this plan. As of FY22, KE’s recovery ratio stood at 96.7 percent. KE also plans to increase the recovery of bills under this investment plan.

During the hearing, NEPRA officials raised questions about the impact of the investment made in the past and the investment targets set by the power regulator.

KE officials informed NEPRA that the company had invested Rs225 billion, exceeding the investment target of Rs200 billion set by NEPRA. NEPRA officials also raised questions about the impact of investment on consumers.

KE officials said that they were requesting actual indexation of the dollar rather than based on assumptions, and consumers would benefit from the tariff set by the power regulator, even if KE is unable to achieve the targets.

In conclusion, KE’s investment plan for the next seven years aims to reduce T&D losses, increase loadshed exemption percentage, and maintain a balance between affordability, availability, and sustainability of power supply.

The company plans to invest heavily in growth and expansion, interconnection, loss reduction, maintenance, safety, technological advancements, and IT &