By Ayesha Saba ISLAMABAD, April 18 (INP-WealthPK): The National Electric Power Regulatory Authority (NEPRA) says despite regular instructions and monitoring, the power distribution companies (DISCOs) did not show any distinguishable performance in the fiscal year 2021. Therefore, the regulator says major reforms like the privatization of DISCOs are needed to make them efficient. The distribution companies’ inefficiencies have been identified as one of the major power sector issues. The performance of these electricity firms has deteriorated in all areas, including unsatisfactory service, theft, and technical losses. For a long time, NEPRA has set goals for collecting receivables and lowering transmission and distribution losses. Except for marginal improvement in some DISCOs, no major improvement has been achieved. However, over the last five years, steps have been taken to revamp the electrical transmission and distribution infrastructure. According to the NEPRA State of Industry report, during the FY 2020-21, around 8.15% growth was recorded in the sales of DISCOs, including K-Electric (KE). In CPPA-G (Central Power Purchasing Agency) and KE territories, overall sales growth of 7.51% and 12.55% have been recorded, respectively. DISCO-wise highest growth of 11.64% was recorded in Tribal Electric Supply Company (TESCO), while in Quetta Electric Supply Company (QESCO), negative growth of -1.3% was recorded during the year. Similarly, category-wise highest sales growth of 53.37% was recorded in public lighting followed by the industrial category where the sales growth of 16.53% was recorded during the year. In the category of bulk supply, a negative growth of -3.85% was recorded during FY21. Although the losses of DISCOs during FY21 have shown a decrease over the actual losses recorded during FY20, the losses of all DISCOs except TESCO, Gujranwala Electric Power Company (GEPCO), Faisalabad Electric Supply Company (FESCO), and Multan Electric Power Company (MEPCO) are still higher than the targets given for FY20. In Pakistan, the issuance of distribution licences under the existing regulatory regime means that each company has its defined service territory. Accordingly, a DISCO has a specific cost of service for the supply of electricity to its service territory. The entire country is divided into regional markets and each distribution company is responsible for meeting the supply requirement of its own market or service territory. The cost of service means differential tariffs for each market or service territory. The recovery position (%) of each distribution company against the billed amount during FY21 and its comparison with FY20 is shown in the table below. According to WealthPK research, DISCOs have been given a target of 100% recovery against the billed amount. However, against the target, the combined recovery of all DISCOs during FY21 remained 97.30% i.e., short by 2.70%. The recovery of all DISCOs except QESCO showed improvement during FY21 over the last year. The recovery of QESCO has dropped from an already low 49.25% to 39.80%, showing a decrease of 9.45%. The short recovery of the billed amount leads to increase in circular debt. NEPRA emphasizes that DISCOs must regularly perform maintenance operations. DISCOs must ensure efficient billing and 100% recovery. NEPRA has also taken serious notice of the volume of pending applications for new connections, and directed all DISCOs to fulfil their obligations under NEPRA’s Performance Standards Distribution Rules, 2005 and Consumer Service Manual 2010. The compliance of DISCOs in this regard is monitored on a monthly basis.