Pakistan’s power regulator has slapped hefty fines on two electricity distributors in Sindh after they failed to meet performance and safety standards during the last financial year.
The National Electric Power Regulatory Authority (NEPRA) fined Sukkur Electric Power Company (SEPCO) a total of Rs70 million and Hyderabad Electric Supply Company (HESCO) Rs25 million for exceeding loss targets, underperforming in bill recoveries, and breaching safety protocols in FY24.
Why the fines were imposed
SEPCO received a Rs50 million penalty for its weak recovery performance and rising transmission and distribution (T&D) losses, plus an additional Rs20 million for failing to properly ground electricity poles and ignoring safety compliance orders. HESCO was fined Rs25 million for similar lapses in loss control and recoveries.
These actions follow NEPRA’s Circular Debt Report for FY24, which painted a grim picture of the sector: national power losses rose to 18.31%, well above the allowed 11.77%, adding roughly Rs276 billion to the ballooning circular debt. This came despite the government allocating Rs163.1 billion for network upgrades.
Losses keep mounting
According to the report:
- SEPCO: Losses climbed to 34.91% (from 34.43% last year), causing Rs29.1 billion in financial damage — a sharp rise from Rs20.4 billion.
- HESCO: Losses inched up to 27.62% (from 27.53%), with financial impact growing from Rs15.1 billion to Rs23.2 billion.
Recovery rates also tell a worrying story. The national average held steady at 92%, but the actual amount left unrecovered jumped to Rs315 billion, compared to Rs236 billion a year earlier. SEPCO’s recovery rate slid to 65% from 67%, leaving Rs38 billion unpaid. HESCO’s figures were not disclosed, but the regulator confirmed it missed targets.
Regulator rejects excuses
Both companies blamed their poor performance on high power tariffs, difficult economic conditions, political interference, and electricity theft. NEPRA, however, dismissed these justifications as overstated or unsubstantiated.
The regulator stressed that the penalties are meant to enforce accountability in a sector plagued by inefficiency, theft, and weak enforcement — all of which translate into higher costs for paying consumers.
