POWER DISTRIBUTION

PROGRAM
2010-2015
 DISCO
AMI CELL

This brochure was produced for the USAID Power Distribution Program (2010–2015), which is funded by the American people, delivered through the United
States Agency for International Development (USAID). The contents were developed by the International Resources Group of Engility Corporation,
implementer of the Program, and do not necessarily reflect the views of the U.S. Government or USAID.
October 2015
 CONTENTS

1
Program Overview .........................................................................................................1
Pakistan Power Distribution Companies and their Profiles
Summary / Overview of PDP Interventions and Projects

2
Strengthening Governance and Policy Reforms......................................................4
Support to Sector Oversight Institutions.................................................................4
Cost Reflective Tariff Determination.........................................................................5
Governance..............................................................................................................................6
Improving Financial Management.................................................................................7

3 Improving Load Management and Operations..............................................................8

Automated Load Data Monitoring and Control System................................9
Modernization of the Planning and Engineering (P&E) Function.............10
Tools for Outage Reduction........................................................................................11

4 Loss Reduction and Revenue Improvement..........................................................12

Commercial Loss Reduction........................................................................................13
Technical Loss Reduction...............................................................................................15

5 Training and Capacity Building..............................................................................................18

Training Programs...............................................................................................................19
Training Facilities..................................................................................................................19

6 Communications and Consumer Outreach.................................................................20

7 Focused Support to PESCO..................................................................................................21

8 Focused Support to MEPCO................................................................................................23

9 Gender Facilitation.......................................................................................................................25
Pakistan’s Power Distribution Companies (DISCOs) and Their Profiles (Fiscal Year 2015)

Peshawar Electric Supply Company (PESCO) Faisalabad Electric Supply Company (FESCO)
Serves the province of Khyber Pakhtunkhwa Serves central Punjab
2.9 million consumers 3.4 million consumers
Peak demand 2,718 MW (megawatt) Peak demand 3,062 MW
Security and law and order issues Consumer base: industrial, mostly textile
42.6% aggregate technical and commercial factories
(AT&C) loss, mainly due to high transmission 10.9% AT&C loss, 100%
and distribution losses (34.8%) revenue collection
Gujranwala Electric Power Company (GEPCO)
Serves northeastern Punjab
Islamabad Electric Supply Company (IESCO) 2.9 million consumers
Peak demand 2,335 MW
Serves Islamabad, northern Punjab, some of Consumer base: steel industry and small fan
Azad Jammu and Kashmir factories
2.4 million consumers 13.3% AT&C loss
Peak demand 2,206 MW
Consumer base: Mostly government consumers
17.6% AT&C loss.

Tribal Electric Supply Company (TESCO)

Serves the Federally Administered
Tribal Areas (FATAs)
0.4 million consumers
Peak demand 379 MW
Relatively new, licensed in 2013
Security and law and order issues
Islamabad
40.1% AT&C loss

PAKISTAN Lahore Electric Supply Company (LESCO)

Serves eastern part of Punjab
3.9 million consumers
Peak demand 5,034 MW
Highest density service area
17.6% AT&C loss

Multan Electric Power Company (MEPCO)

Serves southern Punjab
Largest consumer base, 5 million consumer
Peak demand 4,098 MW
Supplies power to 25% of the country’s
tubewells
14.9% AT&C loss

Quetta Electric Supply Company (QESCO) Sukkur Electric Power Company (SEPCO)
Serves the province of Balochistan Serves northern part of Sindh
0.5 million consumers 0.7 million consumers
Peak demand 1,468 MW Peak demand is 1,252 MW
80% of load comes from tubewells Relatively new, licensed in 2011
Rural delivery and law and order issues Inherited highest loss areas from HESCO
75% AT&C loss, 33% revenue collection 64.3% AT&C loss

Hyderabad Electric Supply Company (HESCO)

Serves southern part of Sindh
1.0 million consumers
Peak demand 1,134 MW
43% AT&C loss
PROGRAM OVERVIEW
The Power Distribution Program (PDP) is part of the assistance the Through PDP, USAID:
Government of the United States provides to the Government of Pakistan Increased the revenues
through the United States Agency for International Development (USAID) of DISCOs by up to
$400 million a year
to support the energy sector. This was a five-year (2010–2015) (USD)
$218 million program. Launched in September 2010, this program was Eliminated up to 85%
of unscheduled load
designed to facilitate improvements in Pakistan’s government-owned shedding countrywide,
electric power DISCOs through interventions and projects addressing reducing Pakistan’s
governance issues, technical and non-technical losses, and low revenue economic losses by up
to $180 million a year
collection.
Reduced losses and
demand by more than
The main goal of PDP was to improve the commercial performance of the
200
participating DISCOs through technology upgrades and improvements in megawatts—enough to
processes, procedures, and practices, as well as training and capacity continuously supply
electricity to 400,000
building. PDP also assisted the Ministry of Water and Power and the
homes
regulator—National Electric Power Regulatory Authority (NEPRA)—to
improve power sector governance, the regulatory framework, and their
operational capacity. PDP supported the Privatization Commission for
moving closer towards the privatization of DISCOs.

Major areas of work:

• Strengthening governance and policy reforms
• Improving load management and operations
• Loss reduction and revenue improvement
• Training and capacity building and gender facilitation
• Communications and Consumer outreach

Since 2013, PDP activities focused on two DISCOs: PESCO delivering

power to 2.9 million Consumers (23 million people) in the province of
Khyber Pakhtunkhwa and MEPCO delivering power to 5 million
Consumers (33 million people) in southern Punjab. These two companies
are responsible for more than 38% of losses incurred by all the DISCOs.
The improvements introduced by PDP have increased the revenues of
DISCOs by approximately (USD) $400 million and have eliminated as
much as (USD) $180 million in annual losses to Pakistan’s economy.

1
Summary / Overview of PDP Interventions and Projects

Area of Quantities
Intervention / Project
Performance (if applicable)
FESCO GEPCO
Governance Support (Multiple Activities)
Strengthening Strategic Business Planning
Governance and Enterprise Resource Planning (ERP) Manual
Policy Reforms New Accounting and Internal Audit Manuals
and Financial
10-Year Financial Forecast Model
Management
Improvement ERP Implementation
Cost of Service Study (CoSS)
Board Trainings
Load Data Monitoring and Control System 9,335 meters,
Improving Load 10 control centers
Management Modernization of Planning and Engineering Function
and Operations
Tools for Outage Reduction 10,000 devices
Introduction of Electronic Meter Reading Devices 1,450 devices

Revenue Protection and Recovery Activities

Consumer Information System

Low Loss Transformers 228 transformers

Loss Reduction Advanced Metering System 71,200 Automatic Meter

Reading (AMR) meters
and Revenue
ABC Cabling 1,000km cable
Improvement
Meter Replacement 210,000 meters
Capacitor Banks for High Tension Power lines, 125 capacitor banks
Voltage Regulators +80 regulators

Installing Capacitors on Tubewells 89,000 capacitors

Upgrades of Municipal Pumps 210 pumps in Islamabad &

Karachi
Upgrades of Industrial Motors 1,539 motors

Functional, Management, and Linemen Trainings 31,000 employees trained

Linemen Tool Sets Provided Sets of tools

Linemen Vehicles Provided 200 vehicles

Training, Organizational Assessment and Restructuring

Capacity
Internships 52 interns
Building, and
Gender Information Technology (IT) Labs 8 labs
Facilitation
Utility Exchange Program 148 persons
Gender Equity Training
Day Care Facility for Employee's Children 1 facility

Rest Area for Women 1 rest area

Improvements in Consumer Service Centers 82 centers

Communication Energy Conservation, Anti-Theft Campaigns 14 million people reached

and Consumer
Communications and Outreach Office Support
Outreach
Consumer Awareness Kits

2
 Distribution Company Others
HESCO IESCO LESCO MEPCO PESCO QESCO SEPCO TESCO MWP NEPRA

3
Governance & Policy Reform Workshop

STRENGTHENING GOVERNANCE AND

POLICY REFORMS
PDP advisors worked with the Ministry of Water and Power, NEPRA, the
Privatization Commission, and DISCOs to facilitate policy reforms and
improvements in the sector’s governance to reduce the need for
government subsidies, allow the sector entities to recover their costs, and
improve the delivery of power to consumers.

Developed with PDP Support to Sector Oversight Institutions

support:
PDP supported to the Ministry of Water and Power, NEPRA, and the
Circular Debt Report Privatization Commission included the development of reports, preparation
Sector Policy of guidelines and policies, training of employees and staff, and delivery of
Code of Corporate advisory services. Similarly, PDP assisted the Pakistan Engineering Council
Governance (PEC), a statutory body regulating the country’s engineering profession, to
Amendments to the formulate and develop a national electric safety code.
Electricity Act
One of the most important contributions to the sector has been the Circular
CPPA-G
Operationalization Debt Report, which PDP developed in collaboration with other USAID
partner programs. For the first time ever, this report defined and quantified
the sources and magnitude of circular debt being generated in the power

4
sector. Several of the recommendations have already been adopted by the
government of Pakistan; for example, payment for an adequate operating
subsidy to DISCOs, payment for the tariff differential subsidy on behalf of
the DISCOs, settlement of the cases on fuel prices by the court, and
timely fuel price adjustments. Additionally, generation companies now
receive funding to restore the capacity of their plants and use technical
studies to support their tariff applications.

Other PDP-supported documents include the 2013 Power Sector Policy,

which has outlined policies for each part of the power sector; the Code of
Corporate Governance for Public Sector Companies; Best Practices for
the Adoption of the Regulatory Framework for Franchising and
Distribution Services (prepared in 2014); and amendments to the
Electricity Act.

PDP assisted the Ministry of Water and Power in setting up the Central
Power Purchasing Agency Guarantee Limited (CPPA-G) to operate as an
independent wholesale power purchasing agent between power
generation companies (GENCOs) and DISCOs; to encourage the efficient,
effective, and transparent settlement of power pool payments; and to
promote a more competitive power market. PDP helped CPPA-G
develop a business transfer agreement with the National Transmission and
Dispatch Company (NTDC), market operator registration rules and
commercial code, power procurement and agency agreements, and
operating procedures. Similarly, PDP supported the development of a
market structure and franchise model for NEPRA and DISCOs.

To improve the overall operations of the Ministry of Water and Power,

PDP expanded the Ministry’s information technology (IT) infrastructure
and trained the Ministry’s staff to use it. Almost all of the Ministry’s staff
received desktop computers and related software from PDP along with a
Web-based dashboard application that maintains information flow
between the Ministry and DISCOs. Finally, PDP facilitated sector-level legal
and regulatory due diligence processes to prepare for the privatization of
DISCOs.

Cost Reflective Tariff Determination

A crucial factor in sustained profitability of any DISCO is the tariff— rate the
company can charge its consumers for electricity. The current tariff structure
cross-subsidizes electricity supply from one category to another and covers

5
Composite Parts of the Power Tariff

Developed with PDP only part of the costs that DISCOs incur. To enable DISCOs to recover
support:
their full cost of service, PDP facilitated the development of more effective
Guidelines for the methodologies for the determination of an Electricity End-User Tariff
Determination of
(both annual and multi-year) and the Cost of Service Study (CoSS). These
Single and Multi-Year
methodologies pursue the goals of the 2014 National Tariff and Subsidy
Electricity End-User
Tariffs Policy and serve to determine both single and multi-year consumer tariffs.

CoSS
CoSS alone is expected to increase cost recovery at DISCOs by
approximately (USD) $63 million a year. CoSS tabulates the costs a utility
incurs and then allocates these costs to different Consumer categories. By
October 2015, CoSS was adopted by all DISCOs as a tool to develop
tariff petitions.

While developing these methodologies, PDP identified and helped

eliminate an anomaly in the calculations of one of the tariffs, resulting in a
(USD) $42 million increase of the annual revenue for DISCOs. PDP also
improved the methodology for calculating the Cost of Capital (allowed
profit) at each DISCO. This methodology was adopted by NEPRA in early
2015 and will increase the revenue for DISCOs by approximately (USD)
$78 million each year.

Governance
At the request of the Ministry of Water and Power, PDP developed
performance contracts for DISCOs in 2014. Key performance indicators
and monitoring mechanisms were established to track the overall
performance of DISCOs. By 2015, all government-owned DISCOs had
signed performance contracts with the Ministry. With PDP’s assistance,
DISCOs developed their five-year Integrated Generation, Transmission,
and Distribution Plans (IGTDPs) in 2014 and submitted them to NEPRA
for approval. Implementation of these plans will optimize resource
allocation and lead to savings in investments, loss reduction, and improved
revenue.

6
Improving Financial Management

PDP introduced business planning as a standard management tool for all Developed with PDP
DISCOs. PDP involved NEPRA in the delivery of workshops to DISCOs. Such support:
collaboration ensured that NEPRA understands the role and process of business IGTDPs
planning in the regulation of DISCOs. As a result, NEPRA instructed DISCOs to 10-Year Financial Forecast
Model
develop the Business Plan/Distribution Investment Plan (DIP) as the basis for
ERP Implementation
their Fiscal Year 2015 petitions for annual or multi-year tariff petitions and Internal Audit Manual and
budgets. PDP actively worked with MEPCO and PESCO to prepare a five-year Framework
strategic business plan for Fiscal Years 2016 to 2020. Earlier, PDP provided all Accounting Manual
the DISCOs with a 10-year financial forecast model to be integrated into the
business plan. PDP also worked with all the DISCOs to develop new accounting
manuals and new internal audit manuals to replace legacy manuals from the
1980s PDP also introduced risk-based audits.

For integrated automation of back office functions, PDP implemented enterprise

resource planning (ERP) in both PESCO and MEPCO in the areas of finance,
inventory management, and human resources (HR) and provided an ERP
documentation manual. This will help the DISCO management to have access to
timely and accurate information to monitor and reduce financial losses.

7
US Ambassador at the Innugural of the Network Operations Centre Lahore

IMPROVING LOAD MANAGEMENT

AND OPERATIONS
The Pakistan power sector is beset with a number of challenges, but most
Load data monitoring
and control system important is the supply demand gap that is covered by 6 to 12 hours of load
consists of:
shedding across the country. The most irritant aspect was the unscheduled load
A Network Operation shedding, which was causing more economic losses and affecting and
Center interrupting the general public’s normal life leading to widespread public unrest.
10 Power Distribution At the request of the DISCOs, PDP addressed this issue by implementing the
Control Centers
9,335 Smart Meters to Load Data Improvement (LDI) project. As a result, unscheduled load shedding
Track and Report Data was drastically reduced.
A Display and Control
Screen at the NPCC
PDP implemented a series of interventions that have made a significant impact
on the power flow through the network, therefore improving the delivery of
power to consumers.

8
Automated Load Data Monitoring and Control System
To improve the management of the power flow within the distribution
system and reduce unscheduled load shedding, PDP modernized the
monitoring and control system in the country’s distribution network. The
$180
intervention included the establishment of the Power Distribution Control million
Centers at the 10 DISCOs, establishment of the Network Operation in annual damages to
Pakistan’s economy
Center at WAPDA House in Lahore, and the creation of access to eliminated
real-time data on power flows for the National Power Control Center
(NPCC) and the Regional Control Centers for the northern and southern
parts of the country. Additionally, PDP installed 9,335 automatic meter
reading (AMR) / smart meters in all 762 grid substations country-wide to
transmit real-time data on loads in various parts of the power network to
the control centers. This initiative significantly improved load management
and helped eliminate as much as 85% of unscheduled load shedding since
July 2013.

According to an audit conducted by two independent international

consulting firms, the decreased instances of unscheduled load shedding
$62.3
have reduced Pakistan’s annual economic losses by as much as (USD) million
$180 million. Additionally, it has increased the power sector’s annual in revenue
added for distribution
revenue by (USD) $62.3 million by diverting more power to DISCOs companies
with low losses and better collection of revenue.

Reduction in Unscheduled Load Shedding in 2012–2014

6000
Automation of control, July 7, 2013
Year 2012
5000

Year 2013

4000
Year 2014

3000

2000

1000

Timeline

9
 Newly Eastablished P&E Computer Centre MEPCO

Modernization of the Planning and Engineering (P&E) Function

To improve planning of the expansions and rehabilitation of the power
Enterprise network, PDP helped DISCOs modernize their P&E departments. P&E
departments are responsible for developing power distribution network
GIS rehabilitation and expansion plans to optimize the power flow and cater
deployed for new connections based on load forecasts.

The first step in the activity was creating a Geographic Information System
(GIS) database for the entire distribution network to prepare an accurate
record of network configuration. To initiate the process, PDP helped
develop GIS maps for one area of each DISCO, established a computer
center at each DISCO, and supported processing of the data into a GIS
database. Currently, DISCOs are mapping their networks on their own. By
October 2015, over 38% of the country’s network was mapped using this
technology. Additionally, PDP purchased and installed specialized power

38% of flow analysis software for all DISCOs. This software has significantly
enhanced the ability of network planners to identify the most
distribution cost-effective ways to plan network expansions and upgrades based on

networks technically sound solutions.

mapped This new technology saves operational costs, enables DISCOs to properly
manage loads on power lines and transformers, and improves the delivery
of power to consumers.

10
 Installation of Outage Reduction Devices

Tools for Outage Reduction

The power distribution system reliability is critically important for both
utilities and consumers. Due to the lack of sectionalizing devices in
DISCOs distribution system, consumers located not in the vicinity of the
area of the fault are also affected during outages. PDP introduced Outage
Reduction Devices (ORD) to mitigate hardship and loss of business /
production of consumers resulted due to unwarranted interruptions.

To demonstrate ways to reduce the number of Consumers affected by 10,000

unwanted power outages in case of scheduled maintenance or line faults, devices
PDP provided seven DISCOs—HESCO, FESCO, GEPCO, IESCO, installed to reduce the
impact of power outages
LESCO, MEPCO, and PESCO—with equipment that isolates outage areas
and speeds up detection of faults in the system. Approximately 10,000
devices including fault indicators and switches (equipment that isolates
outage areas) were provided for installation at strategic locations of the
distribution network. At least one of the DISCOs (GEPCO) has already
started to replicate these improvements throughout its entire geographic
jurisdiction at its own expense.

11
Installation of Smart Meter

LOSS REDUCTION AND REVENUE

IMPROVEMENT

In FY 2015, AT&C One of the major reasons for poor power supply is extensive losses in the
losses in the distribution distribution system. Approximately half of the distribution losses are
sector were 27%. In
developed countries, technical (i.e., losses incurred during the flow of power through the power
losses do not exceed lines and other infrastructure), while the remaining half are commercial
10%.
losses caused by incorrect billing, the inability to collect billed amounts
from consumers, and electricity theft. A 2012 study by PDP has suggested
that if relatively efficient DISCOs could keep their losses below 10% and
poor performing DISCOs to 15 %, the system would save approximately
$500 million a year.

PDP carried out a wide variety of interventions to help DISCOs reduce

both commercial and technical losses in order to improve their revenues.

12
 (a) Reading with an HHU (b) RF enable three phase and single phase Meter Installations

Commercial Loss Reduction

To help DISCOs improve commercial losses, PDP worked to revise meter
reading processes, enhance consumer billing, and discourage electricity
theft.

Manual meter reading is highly prone to misreporting and errors. Typically,

meter readers visit each consumer once a month and write down data
from electricity meters into notebooks; recordings are then manually
transferred into other paper-based ledgers for the production of bills.
2.3
Oftentimes, meter readers simply copy data from corresponding months million
of the previous years or change recordings to favor some of the consumers have their
meters read using
consumers. The resulting bills are very inaccurate, and many consumers hand-held electronic
devices
either complain or refuse to pay the bills altogether, causing huge losses in
revenues for DISCOs.

To improve the accuracy of electricity bills, PDP streamlined meter reading

processes at MEPCO and PESCO and has introduced hand-held electronic
meter reading devices in several areas covered by MEPCO, PESCO, and
IESCO. The use of these devices alone has significantly reduced losses and
improved consumer satisfaction and payment of bills, leading to increases
in DISCO revenue.
13
 Seeing the impact of this intervention, MEPCO and PESCO have begun
adopting electronic meter reading devices throughout their geographic
jurisdiction, and the Ministry of Water and Power instructed all DISCOs to
follow this approach. PDP assisted MEPCO and PESCO to expand this
activity to cover a total of 2.3 million consumers.

Additionally, PDP introduced various metering technologies. Over 210,000

210,000 meters were upgraded or replaced at MEPCO, PESCO, and several other

electricity DISCOs, including 71,200 Automatic Meter Reading (AMR) meters that

meters send information from the consumer’s premises to the billing system
automatically, eliminating the need for any manual processing. AMRs were
replaced
installed for high-consumption consumers at MEPCO and PESCO.

In yet another effort, PDP helped MEPCO and PESCO design and install a
state-of-the-art billing system called the Customer Information System

4.6 million (CIS). This system streamlined billing processes for 1.7 million (33% of all)
MEPCO consumers and 2.9 million PESCO Consumers (100%). PDP
Consumers at MEPCO and
PESCO will be served by support included analysis of the consumer databases at the two DISCOs,
the new CIS
consumer registration, and transfer of the data into electronic databases,
purchase and configuration of the new computer-based systems, and
training of staff to operate these systems. By overhauling the way DISCOs
conduct their business, the new system reduced operating costs, enhanced
employee efficiency and productivity, and improved Consumer satisfaction.

Additionally, PDP helped design and broadcast mass media campaigns to

discourage theft and promote energy conservation. One thousand

1,000km kilometers (km) of aerial–insulated/bundled cable (ABC) was provided for

installation in congested areas of Peshawar and Multan to mitigate power
anti-theft cable provided
theft from the power lines and improve public safety. PDP trained teams
of DISCO employees who are currently conducting prosecution of power
theft cases, recovery and collection of arrears, and mobilization of
communities against electricity theft at MEPCO and PESCO. As of June
2015, these teams have recovered (USD) $1.4 million in revenues for
both DISCOs.

$42 million PDP also helped DISCOs identify and address an error in electricity
charges for Time of Use consumers. These consumers were being
will be added to annual
revenues due to correction under-billed due to an erroneous billing formula. Annually, this correction
of tariff formula will add as much as (USD) $42 million to the DISCOs revenues

14
 Installation of HT switched capacitor bank

Technical Loss Reduction

Technical losses are an inherent part of any distribution system; however, in

Capacitors are used to
most other countries, such losses are significantly lower due to higher
stabilize voltage and power
investment in system planning, maintenance, and upgrades. To reduce flow through the power
technical losses, PDP promoted the use of new technologies and equipment network and to reduce
power losses.
in the power network as well as on the demand side.
Voltage Regulators are
designed to automatically
To demonstrate loss reduction technologies, at MEPCO and PESCO, PDP
maintain a constant voltage
installed 228 low loss and self-protected transformers for installation in level.
congested areas. Additionally, PDP helped install 125 high-tension switched
Transformers transform
capacitors, 80 voltage regulators, and similar equipment on selected power the electrical supply from
lines to improve the management of reactive power and voltage on lengthy one voltage to another.
power lines. This project will reduce losses on the upgraded power lines by
approximately 5%.

15
 Several activities focused on demand side management, which is
considered to be the most cost-effective option in improving energy
efficiency. PDP worked to improve the efficiency of two types of
equipment: tubewell pumps and industrial motors.

Tubewell pumps account for about 12% of the total energy consumption
128 MW in Pakistan. Due to low efficiency, these pumps cause huge technical losses,
of electricity will be saved creating unnecessary demand for power. PDP provided more than 89,000
by 89,000 capacitors capacitors for installation on agricultural tubewells for consumers of
installed on agricultural
tubewells MEPCO, FESCO, LESCO, PESCO, IESCO, HESCO, SEPCO, and QESCO.
This reduced electricity demand by approximately128 MW. Additionally,
210 inefficient municipal tubewell pumps were replaced in Islamabad and
Karachi in 2012 and 2013.

Industrial motors, on the other hand, are responsible for 60% to 80% of
12.5 MW the industrial power consumption in Pakistan. PDP replaced 1,539
inefficient motors and installed 749 variable speed drives on the industrial
saved by replacement of
1,539 inefficient industrial motors in the areas served by FESCO, IESCO, MEPCO, HESCO, LESCO,
motors
PESCO, and SEPCO, reducing industrial power consumption by
approximately 12.5 MW.

Distribution Company Losses in 2014–2015

100.0
Transmission and distribution losses ( % )
90.0
Revenue collection losses (%)
80.0
Aggregate commercial and technical losses (%)
70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0
LESCO GEPCO FESCO MEPCO IESCO PESCO TESCO HESCO SEPCO QESCO
-10.0

16
 Programming of
Automatic HT Voltage Regulator
 Interactive training session for DISCOs

TRAINING & CAPACITY BUILDING

Gaps in employee skills contribute to the sub-standard functioning of the
power sector institutions and poor power supply to the Consumers. To
eliminate these gaps, PDP conducted an extensive range of
capacity-building programs at all DISCOs and at NEPRA. All training
activities complemented the physical improvements to ensure that changes
introduced by PDP are sustainable.

Most of the capacity-building activities used a three-tier model: (1) training

of local staff in a classroom setting; (2) on-the-job training whereby trained
staff used new skills in their work with support of PDP staff; and (3) staff
used their newly learned skills mostly independently, while PDP experts

Types of Training Courses Provided and Number of Employees and Staff Trained

Linemen Safety, Line Maintenance

Staff Trained by PDP-Trained Trainers
Information Technologies
Engineering
Accounting/Audits
Meter Reading
HR, Training of Trainers
Courses for Middle-Level Managers
Courses for Senior-Level Managers
Consumer Service
Gender Equity
DISCOs Staff Embedded in PDP Teams
Communications
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

18
provided occasional advice and monitored performance. In addition to
training initiatives, PDP facilitated organizational restructuring at NEPRA,
MEPCO, and PESCO to help them meet their business requirements
and to promote organizational growth, staff retention, skills
development, and enhance employee morale.

Training Programs
Through PDP programs, DISCO employees received training in all of the
functional areas relevant to power distribution sector. Extensive attention
was paid to IT skills to facilitate the automation processes. Several courses
focused on the development of the female workforce, while internships
encouraged young professionals to work in the power distribution sector.

In total, approximately 31,000 distribution sector employees received

training during the lifespan of PDP in various management, leadership, and 31,000
functional skills to lead, support, and sustain changes in the power employees
trained
distribution system.

A significant portion of the training program focused on linemen safety.

Poorly trained and equipped line workers often damage equipment,
increase technical losses, and risk their lives. Approximately 100 linemen
15,000
linemen trained in
die each year while performing their duties; in comparison, in the United safety skills
States, linemen deaths do not exceed six per year. PDP and its trained
trainers have trained more than 15,000 linemen (25% of the country’s
linemen) on proper safety techniques and procedures related to meter
installation.

Additionally, linemen at MEPCO and PESCO received sets of safety tools

and 200 specialized vehicles with all necessary equipment to facilitate
lineman work. To ensure a continuous focus and improvement on linemen
training, senior and middle managers from all DISCOs were trained on
proper verification and compliance of new safety procedures.

Training Facilities
PDP trained trainers, improved the curriculum, renovated premises, and
supplied training aids, tools, and equipment to upgrade a total of 10
training centers at PESCO and MEPCO along with several other DISCOs
training facilities. Additionally, eight computer labs were established at the
Regional Training Centers of MEPCO, PESCO, GEPCO, LESCO, HESCO,
and QESCO as well as at the headquarters of MEPCO and PESCO to
facilitate transition to automated processes at DISCOs.

19
 PDP & FESCO jointly organized energy conservation walk in Faisalabad

COMMUNICATIONS AND CONSUMER

OUTREACH
To strengthen the ability of DISCOs to manage relationships with
14 consumers, PDP worked to enhance their communications skills and

million outreach functions. DISCOs received support in the preparation of

consumer outreach materials (documentaries, posters, leaflets, and similar
people reached
items) on new connection procedures, submission of complaints, public
safety, the consumer’s role in discouraging theft, and energy conservation.
Additionally, PDP helped PESCO and MEPCO develop and run a series of
weekly FM radio talk shows and energy conservation and anti-theft
campaigns. At least 70,000 people increased their awareness of the power
sector issues through direct outreach activities, and approximately 14
million people were reached through mass media campaigns, mostly in the
areas served by PESCO and MEPCO, in 2010 through 2015.

In a related activity, PDP supported the transformation of several

Consumer service centers at PESCO and MEPCO into one-window
Consumer service facilities that address Consumer complaints and queries.
Additionally, all the subdivision offices and their Consumer service
counters in Multan and Peshawar, as well as Consumer service centers at
FESCO, GEPCO, HESCO, and LESCO, were renovated to provide
comfortable and appealing reception areas for consumers.
20
Sets of lineman safety, equipment, tools and customized vehicle for line staff

FOCUSED SUPPORT TO PESCO

PESCO was selected for more extensive PDP support in late 2012 due to
the large gap between the power delivered and the costs recovered. With
$100
AT&C losses at 47.4% in 2012, PESCO incurred approximately $370 million
million in overall losses. added to annual
PESCO revenue
As a result of the collaboration with PDP, PESCO’s losses declined from
47.4% to 42.6%. This has enabled PESCO to add more than $100 million
in the annual revenue. Additionally, for the first time in its history, PESCO’s
revenue for the Fiscal Year 2014–2015 covered its operational costs.

PESCO serves the Khyber Pakhtunkhwa Province, a territory that borders

the FATAs and Afghanistan. The province houses a large contingent of
Afghan refugees as well as internally displaced persons from FATA, where
5%
reduction in PESCO’s
the government of Pakistan is waging a war against terrorists. This makes losses in 2012-2015
PESCO operations highly susceptible to security and law and order issues.

21
Equipment provided and PDP’s work at PESCO focused on (1) improving the accuracy of consumer
installed in PESCO: bills and overall consumer services and (2) reducing theft and losses and
120,000 quality meters increasing revenue. PESCO received extensive technical support, training,
12,820 AMR meters and an infusion of equipment and tools to improve its operations. PDP has
Sets of lineman tools also significantly improved the accuracy of its metering and billing
100 linemen vehicles processes through the introduction of the AMR meters, electronic meter
2,400 capacitors for reading devices, and similar interventions, reducing consumer complaints
tubewells
and increasing revenues.
3,200 outage reduction
devices To improve the overall functioning of the DISCO, PDP helped PESCO
78 completely undergo organizational restructuring, overhaul the load management
self-protected
transformers system and P&E functions, and adopt a fully automated ERP system for the
400 km ABC financial, HR, and materials management functions. A state-of-the-art
system was introduced to manage billing and Consumer care services for
all of PESCO’s 2.9 million consumers. Additionally, PDP helped PESCO
adopt the Cost of Service Model and IGTDP, design a five-year business
plan, and revise tariff application processes. All these interventions will
enable the company to sustain and scale up the changes introduced with
PDP support.

Field activities were conducted in the high-loss areas of Peshawar City and
its surroundings and focused on the reduction of losses and improvements
in revenues.

To ensure the sustainability of the changes, PDP has trained more than
2,300 PESCO staff in key areas of work, renovated and upgraded
PESCO’s Regional Training Center and four circle-level training centers,
and conducted a wide number of other capacity-building activities.

Losses and Revenue Collection at PESCO in 2010–2015

Revenue collection Aggregate losses

100% 85% 86% 88%

82% 83% 85%
90%
80%
70%
46.2% 48.4%
60%
47.4% 44.3%
50% 43.2% 42.6%
40%
30%
20%
10%
0%

22
 US Ambassador at Regional Training Centre of MEPCO (June 2015)

FOCUSED SUPPORT TO MEPCO

MEPCO was selected as PDP’s second focus DISCO in December 2013
at the request of the Ministry of Water and Power. Since then, PDP $60
assistance has enabled MEPCO to reduce its AT&C losses from 24% to
14.9% and to add more than $ 60 million in annual revenue. PDP worked
million
added to the annual
to improve commercial, technical, and financial performance of MEPCO. revenue of MEPCO
Field activities focus on the Multan Circle, which covers Multan City and its
immediate surroundings.

Progression of PDP Efforts to Improve Customer Billing Systems

2011 2012 2013 2014 2015

PDP begins PDP begins meter PDP begins PDP begins Transition to CIS for:
development of the replacement and automation introduction of 1.7 million Customers
MEPCO CIS, Customer improvement in (e.g., smart CIS at PESCO at MEPCO
registration, and meter-reading meters, and MEPCO.
upgrades to Customer 2.9 million Customers
processes. electronic
service centers. at PESCO
reading devices).

23
 To strengthen the overall operations of MEPCO, PDP introduced a Cost of
Service Model and the IGTDP, designed a five-year business plan, and revised
tariff application processes. All these interventions will enable MEPCO to
sustain and scale up the changes introduced with PDP’s support.

9% Additionally, PDP installed various network upgrades in congested areas

reduction of AT&C including introduction of single phase system and installation of aerial bundled
losses at MEPCO in cable to reduce theft and improve safety. PDP also facilitated organizational
2013–2015
restructuring and introduced a new performance management system.
PDP-led activities have improved the P&E function at the MEPCO
headquarters and nine circle-level offices, whereby MEPCO has documented
more than 50% of its infrastructure into a GIS mapping database and adopted
specialized software to automate the analysis of the network performance,
Equipment provided to
MEPCO: leading to substantial savings in resources needed for network expansion and
42,100 AMR meters rehabilitation.
Sets of linemen tools Similarly, an upgraded load management system has enabled MEPCO to
100 linemen vehicles
eliminate most of the unscheduled load shedding. PDP has also significantly
48,000 capacitors for
tubewells improved the accuracy of its metering and billing processes through the
125 switched capacitor introduction of the AMR meters, electronic meter reading devices, and similar
banks for selected
interventions, reducing consumer complaints and increased revenues. Also
power lines
1,260 outage reduction with PDP’s support, MEPCO automated its financial, HR, and materials
devices management functions through introduction of a state-of-the-art ERP system
150 low loss and and to improve billing for 1.7 million (33%) of all consumers through a CIS. To
completely
self-protected reduce energy loss, PDP increased the operating efficiency of more than
transformers
48,000 agricultural tubewells by the installation of capacitors, releasing demand
80 voltage regulators
and making more electrical power available to other MEPCO consumers.
600 km of ABC
To ensure the sustainability of these changes, PDP has trained more than
3,500 MEPCO staff in key areas of work, upgraded MEPCO’s Regional
Training Center and four circle-level training facilities, and conducted a variety
of capacity-building activities.

Losses and Revenue Collection at MEPCO in 2010–2015

Revenue collection Aggregate losses
120.0

98% 102.3%
94.2% 97.2% 96%
100.0 91.8%

80.0

60.0

40.0
23.7% 20% 20.2% 24% 20.7%
20.0 14.9%

24
 Wife of US Ambassador with DISCO females Trainees

GENDER FACILITATION
In support of the government of Pakistan policies, PDP worked to increase gender awareness and equity in
DISCOs and encourage an increase in the female workforce in these DISCOs. PDP’s gender strategy
included Gender Equity Training for all managers and supervisors to facilitate the development of a DISCO
gender strategy to reduce recruitment disparities and facilitate women’s entry into the DISCOs.

PDP worked with DISCOs to improve workplace environments and to develop policies that mandate and
maintain basic requirements in all new facilities, such as at least one women-only washroom on work
premises and Consumer service centers that provide a culturally sensitive environment for women clients. A
model daycare center was established at MEPCO.

As a result of PDP efforts, gender equity courses became a permanent part of the training curriculum offered
by seven DISCOs. To support adoption of the 2010 Government of Pakistan’s Act on Protection Against
Harassment at the Workplace, PDP facilitated the formation of standing inquiry committees at all DISCOs
and trained committee members on handling sexual harassment cases.
25
PDP established three state of the art Data Centre at Multan Electric Power Company, Peshawar Electric
Supply Company and Power Information Technology Company, WAPDA House Lahore
USAID Power Distribution Program
House 23, Street 19, F 6/2
Islamabad, Pakistan
Phone: +92-51-227-0911
Fax: +92-51-831-2997
www.pdip.pk