The National Electric Power Regulatory Authority (Nepra) has imposed fines totalling Rs95 million on two Sindh-based power distribution companies, Sukkur Electric Power Company (Sepco) and Hyderabad Electric Supply Company (Hesco).
Nepra levied a Rs50 million fine on Sepco and Rs25 million on Hesco for exceeding loss targets, poor recovery performance, and safety violations during FY24. Sepco was also fined an additional Rs20 million for not ensuring proper grounding of electricity poles and failing to comply with safety protocols.
The penalties follow the findings of Nepra’s Circular Debt Report for FY24, which revealed a rise in national electricity losses to 18.31% from 16.84% in the previous year, well above Nepra’s target of 11.77%. This contributed approximately Rs276 billion to the circular debt. Despite Rs163.1 billion allocated for network improvements, distribution companies did not achieve the necessary reductions.
The report highlighted that Sepco’s T&D losses increased to 34.91% in FY24 from 34.43% in FY23, resulting in a financial loss of Rs29.1 billion, up from Rs20.4 billion. Hesco’s losses rose slightly to 27.62% from 27.53%, with a corresponding increase in financial losses from Rs15.1 billion to Rs23.2 billion.
Recovery rates also remained a concern, with the national average holding steady at 92%. However, the unrecovered amount grew to Rs315 billion in FY24, up from Rs236 billion the previous year.
Sepco’s recovery rate fell to 65% from 67%, with an unrecovered amount of Rs38 billion, up from Rs27 billion. Hesco also failed to meet recovery targets, though specific figures were not disclosed.
During regulatory proceedings, Sepco failed to provide satisfactory responses to a show-cause notice, leading to the Rs50 million fine. Hesco was penalized Rs25 million for similar issues.
Both companies cited high electricity prices, weak socioeconomic conditions, political interference, and electricity theft as factors affecting their performance. Nepra, however, found these claims to be unsupported or exaggerated.
In addition to the main fines, Sepco was penalized with two separate Rs10 million fines for failing to achieve 100% pole grounding and for general non-compliance with safety standards. Nepra emphasized that these penalties are aimed at enforcing accountability in the power sector and reducing the financial burden on consumers caused by inefficiencies.
