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Industrial activity: Power sector revenue drops by 67 percent?

Power sector revenue has dropped by 67 percent in terms of industrial activity during lockdown due to Coronavirus in the country, said Pakistan Electric Power Company (PEPCO) sources.

May 16, 2020

Power sector revenue has dropped by 67 percent in terms of industrial activity during lockdown due to Coronavirus in the country, said Pakistan Electric Power Company (PEPCO) sources.
They said the revenue shortfall started by the end of March and continued throughout April as the industrial activity had come to a standstill due to the lockdown. The electricity demand had gone down by over 30 percent, they added. They said the demand for electricity had reduced to 13,000 megawatts in March 2020 compared with 17,500 megawatts of March 2019, which dipped further in April 2020.
However, sources from the Federal Board of Revenue (FBR) told that the demand for industrial load had already been compromised much before the spread of Coronavirus, as a generation capacity of 8000 megawatts was declared as idle capacity in February 2020 due to low industrial activity. Sources from the industrial and commercial consumers said one big reason behind the economic slowdown ahead of Coronavirus was the government's aggressive campaign for enhancing the tax base. Meanwhile, the spread of Coronavirus added fuel to the fire and the economic activity fell down to abysmal low.
It may be noted that a lockdown in the country since March 24th had curtailed the industrial load exceptionally. Similarly, there was a complete closure of hotels and commercial activities in the country during the month of April until 10th of May. Similarly, a large number of offices in public and private sectors have reduced the number of employees or calling them offices on the alternate day that had reduced the electricity load by and large on the system.
The industrial consumption load is around 2,500 megawatt and a load of commercial sector escalates to 2000 megawatt during peak hours while the domestic consumption constitutes 70 percent of the total load. The factor of mild weather was contributing to the low demand for electricity during the month of March and April, they said. However, they added that the factor of lockdown contributed heavily due to its prolonging until May 10.
Interestingly, the ratio of line losses was reduced during the period of low demand while there was a substantial reduction in the recoveries due to low demand.
It may be noted that the power division had initiated a campaign against power theft, last year and it had collected Rs120 billion in additional revenue of the energy sector by the start of 2020. The government had started a campaign to check power theft in various parts of the country and in this regard criminal cases had been registered against 30,000 people. By the end of 2019, about 4,000 persons had been put behind the bars for their involvement in power pilferage while hundreds of employees had been issued show-cause notices for their involvement in corruption.
The PEPCO sources said one reason behind allowing the resumption of industrial and commercial activities to bring down the hardships of labor class, which was laid off soon after the lockdown in the country.

Copyright Business Recorder, 2020