The state took a decision to bring about investor friendly policies to encourage private sector investment in the power sector.
Despite having an installed capacity of 18755 MW including that from Independent Power Producers (IPP), Madhya Pradesh needs to plug Aggregate Transmission and Commercial (AT&C) losses for providing cheap power to the end users, according to a top HPPPL official. “In 2003, Government of India brought about major power sector reforms through Electricity Act, 2003. At that time, MP was facing huge power cuts and supply demand mismatch due to lower generation base of 4673 MW.
The state took a decision to bring about investor friendly policies to encourage private sector investment in the power sector. This led to increased participation of IPPs in the sector and installed capacity grew by almost 300% at 18755 MW in the span of 12 years,” Hindustan PowerProjects Private Ltd Chairman Ratul Puri told PTI today.
“This has resulted in a very competitive Average Cost of Supply (ACS) for state discoms as compared to many other states. Despite having one of the lowest ACS, the state is facing challenge of increased gaps due to lower Average Revenue. This gap can be minimised by Tariff rationalisation and reduction in AT&C losses,” he said.
However Puri pointed out that state discoms stand at cumulative losses of Rs 28,777 crore as of FY 2015 and these surmounting losses are negating the effect of the cheap power available from IPPs and burdening the end consumer with the higher tariff. “Discoms need to strengthen their infrastructure, do some re-engineering to stop the energy pilferage. Such measures will reap more fruits in reduction of AT&C losses without increase in the consumer tariff,” he suggested. The increase in the capacity because of private sector which stand at almost 45% (8347 MW) has made the state of Madhya Pradesh a power sufficient state.
Madhya Pradesh now takes pride in supplying round the clock reliable power to the consumers and being one of the fastest growing states in the country having annual state GDP growth rate of more than 10 per cent. Further, the MP government has also signed Government of India (GOI) initiative of 24X7 power for all by 2019 but that requires to bring down the AT&C losses from current 23.15 per cent to 17 per cent by financial year 2019, he added.