Telangana power regulators headless amid rising sector stress

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Published: September 20, 2019 5:59:21 AM

Telangana was one of the seven states to receive letters from power minister RK Singh which asked them to clear dues at the earliest to avoid the possibility of discoms getting dragged to NCLT.

Telangana, Telangana power regulator, sector stress, power sector, Electricity Act, economy news, TSERC, Telangana State Electricity Regulatory Commission, Telangana State Electricity, Telangana energy department CARE Ratings has recently revised its rating outlook for 11 solar generators supplying power to the state from ‘stable’ to ‘negative’.

The top positions of the Telangana State Electricity Regulatory Commission (TSERC) remain vacant amid rising financial losses of its state-owned power distribution companies (discoms) and ever-mounting unpaid dues to generators supplying power. The regulator has been headless after Ismail Ali Khan, the former chairman, retired in January. Khan was running the show alone after former commission members H Srinivasulu and L Manohar Reddy retired in 2018 and 2016, respectively.

The TSERC top vacancies remain vacant in spite of the Electricity Act, 2003, mandating that “the state government shall, within one month from the date of occurrence of any vacancy by reason of death, resignation or removal of the chairperson or a member and six months before the superannuation or end of tenure of the chairperson or member, make a reference to the selection committee for filling up of the vacancy”.

Queries related to the progress on this front to the Telangana energy department sent on Monday evening remained unanswered till the time of going to press.

“This issue is not only impacting all stakeholders within the sector who are stuck due to pending disputes and approvals, it is also holding back investments in new projects in the state,” a power company executive said on condition of anonymity. The state owes Rs 3,980 crore to thermal power generators as on July end, recording an annual rise of 165%. Overdues — outstanding payment for more than 60 days — to renewable power plants were Rs 632 crore against about Rs 30 crore a year ago. Delayed payments attract a hefty surcharge of 18%.

Telangana was one of the seven states to receive letters from power minister RK Singh which asked them to clear dues at the earliest to avoid the possibility of discoms getting dragged to NCLT.

CARE Ratings has recently revised its rating outlook for 11 solar generators supplying power to the state from ‘stable’ to ‘negative’. It also downgraded the ratings on projects of two subsidiaries of Acme Solar (Dayakara Solar and Grahati Solar) from A- to BBB+.

Telangana discoms reported a loss of Rs 7,610 crore in FY19 despite recording an impressive aggregate technical and commercial (AT&C) losses — an indicator of losses due to pilferage and billing inefficiencies — of 11.8%, signalling that regulatory tariff hikes have been inadequate.

The process for FY20 tariff revisions has not yet been initiated in the absence of TSERC chiefs, risking discoms into further financial woes.
The discoms had estimated that there would be revenue deficit of Rs 9,771 crore in FY19 at tariffs at which it had to supply power to consumers. Out of this, TSERC had approved subsidy requirement of Rs 5,941 crore only while the state government had earmarked only Rs 4,984 crore as power subsidy for the fiscal. The discoms continue to supply power at prices which were approved as early as August 2017.

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