Economic impact of power theft

Electricity theft remains a major challenge in cities across Pakistan. The theft of electricity is not just illegal and immoral but also poses a significant risk to residents and the power infrastructure. Mehfooz Pakistan, a safety organization, has been raising awareness about the risks caused by power theft particularly by illegal kunda or wire hook connections.

Illegal kunda connections are a problem not just in Karachi but cities across the country, affecting the power infrastructure, contributing to electricity theft, frequent outages, and financial losses. This illicit practice not only places a heavy burden on the electrical grid but also creates a dangerous situation due to unregulated, unsafe wiring.

According to figures from NEPRA, there were over 300 fatal incidents from 2021-23. Last year, there were 163 incidents including 111 victims from the general public and 52 employees. These incidents occurred all across Pakistan but the most incidents occurred in Peshawar which reported 41 incidents. IESCO reported 24 incidents, LESCO reported 11, HESCO 14, and SEPCO 9. This causes that this is clearly a nationwide issue which should be addressed.

In the NEPRA State of Industry Report 2023, power distribution companies reported significant Transmission and Distribution (T&D) losses. PESCO reported the highest loss in FY 2022-23, at 37.17 % as compared to the target of 20.24%, with a financial impact of Rs77.5 billion. This was followed by SEPCO which 34.39% transmission losses against the target of 17.12%’; and HESCO which incurred 27.49% losses against the target of 18.63%.  Other DISCOs including IESCO, LESCO, and MEPCO also suffered significant transmission and distribution losses. NEPRA reports that most of the DISCOs fell short of meeting the target losses, resulting in an additional burden of Rs. 160.49 billion to the circular debt.

A large portion of T&D losses are attributable to electricity theft, with illegal connections being a primary culprit. The menace of electricity theft is prevalent in cities across Pakistan. Power utilities regularly conduct operations against electricity thieves, removing a large number of illegal connections. Yet, the problem persists, posing a huge risk to lives and infrastructure.  In areas with high levels of electricity theft, power breakdowns are frequent, leading to prolonged outages, and having both social and economic impacts. This not only disrupts daily life but also impedes businesses and industries, leading to significant financial losses.

Illegal kunda connections bypass the network’s safety protocols, posing significant risks to power infrastructure and the public. The public should end this abhorrent and illegal practice and promote a culture of timely bill payments and discourage electricity theft. The safety risks, economic losses, and disruption caused by these illegal connections are too significant to ignore, and solutions are critical to ensuring a stable and safe energy supply.