We need to tie up long- and short-term power for contingencies: Praveer Sinha

Written by Subhash Narayan | New Delhi | Updated: Jun 16 2014, 07:22am hrs
Tata Power Delhi Distribution (TPDDL), which has the responsibility of providing power to customers in north Delhi, has managed to stave off some heat from the recent crisis. Talking to Subhash Narayan of The Financial Express, TPDDL CEO and executive director Praveer Sinha said the investments made by the company in the past ensured that their consumers in Delhi suffer the least. Excerpts:

How is the TPDDL prepared to handle the acute power problem in Delhi

Our preparedness can be seen from the way we restarted the system after a shutdown caused by heavy damage to the transmission network from the recent thunder storm. You need to do a lot of planning to maintain the flow of power. And planning involves building enough redundancies so that supplies can be maintained despite sharp fluctuation in demand. You also need to tie-up long-term and short-term power to meet contingencies.

What kind of disaster management did you plan

The crisis was averted only because of an effective disaster management system, inter-grid connectivity and coordination between the Northern Region Load Dispatch Centre, transmission, Delhi distribution & generation companies. It could have snowballed into a July 30-31, 2012-like situation, the biggest ever power failure in Indian history.

Soon after the storm, TPDDLs team took stock of the situation to understand the extent of damage and restore power on a war footing. The work was monitored on a real-time basis to speed up relief and restoration work in coordination with its dedicated and committed ground staff. The top-most priority of TPDDL was to restore power supply to emergency services like the Delhi Metro, hospitals, and Delhi Jal Board pumping stations.

What TPDDL's view on the issue of regulatory assets

The Delhi Eletricity Regulatory Commission has recognised regulatory asset of Rs 11,000 crore for 2011-12. If we include 2012-13 and 2013-14, the regulatory assets in the capital for the discoms would shoot up to Rs 20,000 crore. I feel that the regulator still need to do a lot of work on the issue and then have to come up with an action plan to liquidate the regulatory asset till FY13 in an expeditious manner. We have given our views to the regulator on the matter.

How has this (RAs) impacted the discoms

If we take Rs 20,000 crore as regulatory asset for discoms in Delhi, only servicing this level of shortfall at an interest rate of 11-12% would mean an outgo of about Rs 2,400 crore annually without taking into account the principal. Its a huge challenge for the companies. I feel that companies cannot live in a world where they have to only survive on loan. The regulator will have to fund a solution quickly.

Why do you want Delhi discoms to be part of the Centre's RAPDRP (restructured accelerated power development and reforms programme)

We have been asking that Delhi should be included in RAPDRP because ultimately this will benefit the sector and the consumers. Why consumers in Delhi be deprived of this benefit. Other state consumers get it. The benefit that a discom will enjoy by reducing losses and improving efficiency will eventually help in bringing down power tariff.

What is your strategy to reduce the cost of power

Reducing cost of power is a continuous process at TPDDL. We try to procure power on merit order with low cost power being sourced first and highest cost last. So when our procurement goes down, we get highest cost power to back down. This reduces our cost of procurement as we pay only fixed charges for this power. We also give surplus power to few states in winter months when our demand in Delhi is low and take back this power in summer period.

What is the road ahead for the company

We are making smart network a reality in Delhi. About 200 customers have already been put under this initiative with a connected a load of 250 MW. We intend to cover about 3 lakh customers in next three to four years.