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  1. Large outages can’t coexist with low energy deficits

Large outages can’t coexist with low energy deficits

That the data on power outages on the power ministry’s Urja app doesn’t match the estimates put out by the Central Electricity Authority (CEA) on power deficits only confirms that the quality of data being generated is quite poor—the Nagla Fatela fiasco on Independence Day only confirmed this. Nevertheless, on the face of it, the […]

By: | Published: September 14, 2016 6:18 AM
AC star rating, AC star rating news, air conditioner star rating That the data on power outages on the power ministry’s Urja app doesn’t match the estimates put out by the Central Electricity Authority (CEA) on power deficits only confirms that the quality of data being generated is quite poor (Reuters)

That the data on power outages on the power ministry’s Urja app doesn’t match the estimates put out by the Central Electricity Authority (CEA) on power deficits only confirms that the quality of data being generated is quite poor—the Nagla Fatela fiasco on Independence Day only confirmed this. Nevertheless, on the face of it, the Urja app appears to be fairly accurate when it ranks Uttar Pradesh, Bihar, Rajasthan, Haryana and Jharkhand the lowest among all states across a set of parameters; this is borne out by the high debt on their balance-sheets and the precarious state of their finances. In fact, it is hard to believe the CEA when it says the power deficit in Uttar Pradesh is a mere 0.3% at a time when Urja shows monthly power cuts of 143 hours as compared to the all-India average of 16 hours. Obviously what this means is that, with the state electricity board cash-strapped, it can’t afford to buy electricity beyond a point since consumers are not paying it anywhere near the amount they need to. In Karnataka, by contrast, while peak power demand has remained virtually stagnant at around 10 GW for the past three years, the fact that the state’s outages are below the all-India average implies there is not that much artificial suppression of demand. In Haryana, power cuts can extend for as long as 170 hours a month, suggesting a high compression in demand.

The solution lies in either bringing down AT&C losses, the national average for which was 23% in FY14 or in raising tariffs or a combination of both. State governments, however, are reluctant to raise tariffs—as our story on page-1 points out, for the current year, 11 states are yet to file the revisions. And although the onus is on the state regulators to file for revisions in the event the discoms don’t, not many do so; among the exceptions have been Kerala and Tamil Nadu. Nevertheless, there is some progress with the UDAY scheme compelling discoms to bring down AT&C losses and raise tariffs so as to be able to reduce their losses. While the targets for lowering AT&C losses are quite optimistic given the track record of discoms, it is nonetheless a beginning and all attempts have to be made to achieve them. Since the tariff hikes allowed to the discoms are based on fairly aggressive AT&C reduction targets, not achieving them will mean the state-owned discoms will have to foot the burden—that, in turn, will force them to strive to achieve the targets as well as ensure that subsidies given to various consumer groups are reduced over a period of time.

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