So intent do they seem on preserving the status quo that any tariff reworking by state electricity authorities sounds like good news. Especially when it is from Uttar Pradesh, where tariffs were frozen for four years. But just look closely at the UP Electricity Regulatory Commission?s power tariff hike. Bluntly put, no lessons have been learnt. Excessive cross-subsidisation is still pretty much the norm. Commercial consumers and small & medium enterprises will pay 19-22% more, but the hike for domestic consumers is less than half these levels. Naturally, agriculture consumers are immune from any tariff increase. Naturally, again, this will bring no benefit to the farmer. The UP farmer has the distinction of being subjected to the most severe power cuts in the country?average hours of supply came down from 16 hours a day in October 2006 to just about nine-odd hours in December 2007. The so-called ?regulatory reform? that UP went through was meant to address the price/supply issue. But since the average price of power charged to agriculture is still only 42 paise per KWh, while the average supply cost of power is Rs 3.60 per KWh, expect no change in the quantity of farm power supply.
And the power policy is all over the place. Twelve of the 22 major states have notified power cuts or restrictions on industrial and agriculture use. Balancesheets of state electricity boards (SEBs) make for more and more grim reading. Between 2004-05 and 2006-07, total SEB losses went up 13.5%, to Rs 26,868 crore. Include subsidies given by state governments in the arithmetic, and the losses are still high?Rs 15,366 crore. Of course, transmission & distribution (T&D) losses and theft remain big leakages. T&D losses are down from 34.9% in 2003-04 to 28.7% in 2006-07, but that is still way above global benchmarks. As has been repeated by economists and other observers ad nauseam, the power situation won?t change without a big dose of reform. The Electricity Act passed by the Centre is now almost half a decade old. There are implementation problems at the Central level. But that doesn?t prevent states from changing their policies. Yet, so far only 13 states have reorganised their SEBs in line with the Act?s philosophy. That?s the sad shape of power reform in India.
