NEPRA approves a Rs392 billion venture

K-Electric (KE) has been given approval to invest Rs392 billion over seven years to upgrade its energy delivery network by the National Electric Power Regulatory Authority (Nepra).

KE said that if the investment plan was accepted without any reductions, there would be a rise of Rs1.9 per unit in the transmission rate and Rs1.3 per unit in the distribution tariff in the plan that was filed to the power-sector regulator. Therefore, if the Rs484 billion investment plan is approved, there will be a cumulative rise of Rs3.2 per unit (at the PKR/USD rate of 206). The country’s uniform tariff will have an effect on the subsidies.

Regulators did, however, accept an investment plan of Rs392 billion as opposed to KE’s original plan of Rs484 billion. As a result, the tariff increase can be less, and the precise amounts will be determined and discussed when the company’s supply tariff is being processed. Additionally, Nepra authorized a 1.95 percentage point decrease in transmission and distribution (T&D) losses, from 14.58% for the fiscal year 2023–2024 to 12.63% for the fiscal year 2029–2030.

Additionally, it was determined that consumers and KE would split the benefit of any further decrease in losses for that specific year in the ratio of 75:25, should KE have incurred T&D losses that were less than the permitted threshold for that particular year.

Nepra emphasized that in order to reap the most rewards, Scada, a smart network technology, needed to be updated in order to stay up with current technological developments. It gave its approval to a Rs. 8,161 million expenditure for Scada modernization.

With effective staff and outage management, customer communication, and efficient technology, the Outage Management System (OMS) technology helps manage outages and restore power supply to consumers as fast and securely as possible. In general, outage durations are reduced by 20%.

The 200 feeders’ smart network technology, which includes Scada and ADMS, will shorten outage times and enhance service quality. An investment of Rs8,901 million in smart networks has been authorized by Nepra.

Nepra’s decision on the utility’s Transmission and Distribution Investment Plan, which will accelerate the company’s efforts to lower T&D losses, expand its customer base, and strengthen the infrastructure of the power utility to meet present and future needs, was made known by KE in a statement.

In order to provide an increasing number of consumers with a seamless, steady, secure, and continuous supply of energy, investments in power utility infrastructure are needed. According to the statement, KE has more than halved its T&D losses and doubled its customer base and electricity consumption since privatization thanks to investments totaling Rs544 billion. Following submission of the plan in compliance with regulatory requirements, the KE management informed stakeholders of the projects slated for FY 2024–2030 during a hearing in March 2023.

The business claims that KE has clearly defined programs and goals for investment areas including expansion, energy loss reduction, network rehabilitation, maintenance, and safety for this time. “A key area of focus in these operational areas is digitization as well.”

In order to improve internal procedures and increase transparency, the investment plan details initiatives to install additional automated meter readers (AMRs) and adopt technologies including meter data management systems and sophisticated distribution management systems.

In terms of transmission, the plan calls for building new transmission lines and grids, which will increase the dependability of KE’s network and make it possible to take on more electricity from the national grid.

“Over the next seven years, we are looking to invest $2 billion in transmission and distribution to manage the city’s needs through targeted investments and tech-based interventions,” said Moonis Alvi, CEO of KE, in response to the development. In order to modernize our infrastructure and get ready for the future, we would like to thank all of the stakeholders who have helped along the way and who will do so in the future.

The company’s power acquisition program, which KE used to describe its goal of having 30% renewable energy in its generating mix by 2030, is enhanced by the investment plan.

In order to facilitate universal access to reasonably priced energy, the business has obtained regulatory permission for the Request for Proposals (RFPs) related to 640 megawatt renewable energy projects.

A sustainable and cost-reflective tariff is still essential for the timely implementation of the investment plan, according to KE. “Our teams at K-Electric are reviewing Nepra’s decision in detail and will remain engaged with the regulator,” the company stated.