The load shedding in Karachi has entered its second week, and from what it appears, it promises to continue undeterred. The blame game between the Sui Southern Gas Company (SSGC) and K-Electric (KE) has intensified, both blaming the current situation on each other.
The only improvement on KE’s part is that the valued customers are now being told in advance in most cases, of the duration they will be deprived of electricity everyday. Don’t mistake it for any massive improvement in KE’s ability to manage the load any better. It so happens, that KE is not generating enough to lose control of the transmission and distribution yet.
Once the mercury goes higher, and it will be soon, increased load would surely reduce KE’s ability to manage the load. The company’s track record in terms of feeder losses and tripping has not been exemplary, as per NEPRA’s latest report on the state of industry. Granted, that KE has made significant improvements on most accounts, including generation, but the situation remains far from ideal.
KE has put the shortfall of 500 MW to reduced gas availability from the SSGC. The SSGC in return has categorically refuted the claim and has asked the KE to instead go for a Gas Supply Agreement. And surely, it is high time too. KE cannot forever go on shutting down its plants on reduced gas availability, when in fact; it has time and again refrained from inking an agreement with the SSGC.
Some circles suggest that KE’s reluctance to sign a GSA stems from a higher likely cost for gas, as the SSGC would want to bundle it with imported LNG as well. Under normal circumstances, KE should not hesitate having LNG in the mix, be it at high cost, because it continues to be a pass through item. But the inherent flaws in the system are what stop KE from generating electricity on high fuel cost – because it would add to the already ballooned receivables issue.
There is no doubt that KE is also on the receiving end of the circular debt cycle, with many government agencies owing tens of billions to the power utility. The government’s inability to timely clear the subsidy settlement also creates cash flow problems, and this is probably why, KE management would rather produce less electricity and invite the public ire, than generate more and recover less.
Recall that KE prides itself on representative load shedding and has long tied power supply to bill collection. That is no more the case now, and it is not peak summers yet. Both the government and KE have to sit together and come with a sustainable solution. Stop gaps have not worked in the past, and there is no reason why they should work now. Better and timely settlement of dues on the part of government and related institutions, and improved T&D network and a long-term GSA on the part of KE – are required, now.
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