Report of Indian Institute of Public Administration ... - Ministry of Power

DISTRIBUTION
Key Concerns
State Reports (Vol.-III)
Study on `Impact of Restructuring of SEBs’
The investment in the distribution sector during the entire post-restructuring period
has been around 21 per cent of the total investments made in the State power sector.
Even after increase in investments into the distribution sector, the distribution losses
still remain a major area of concern. The data with HERC shows that T&D losses
have remained around 32 per cent and if the reduction in collection efficiency is taken
into account, the losses would be still higher. It is obvious that the DISCOMs have
negated the benefits of efficiency improvements achieved in generation and
transmission to percolate down to consumers in the form of lower tariffs.
The main objectives of the power sector reforms are to rationalise tariffs, remove
inefficiencies and provide quality and reliable power supply to the consumers. On
these counts the outcome does not appear to be encouraging. It is pertinent to note
that:
(a) AT&C losses have shown an increasing trend, with loss levels as high as 38.26
per cent and 42.59 per cent for DHBVNL and UHBVNL respectively;
(b) The amount of receivables has almost doubled for both the DISCOMs taken
together. While it was pegged at around Rs 1,119 crore for the two DISCOMs as
on March 31, 2000, it has shot up to Rs 2,852 crore by 31 March, 2005; and
(c) The average duration of interruption hrs/line has almost doubled, showing the
negative trend and poor reliability of power supply to the consumers by the
DISCOMs.
Pumpset irrigation constitutes the major share towards agricultural consumption of
electricity. At the time of restructuring, nearly 80 per cent of the agricultural pumpsets
were unmetered. Not much progress has been made on this front and the unmetered
agricultural pumpset connections are still as high as 67 per cent. The flat rate system
and extremely low agricultural tariffs in the State can lead to misuse of electricity.
This is also responsible for the excess drawl of underground water. Inefficiency in the
use of water needs to be addressed by reviewing the existing flat rate system of tariff.
Hence, the Government or the Regulatory Commission needs to address this issue.
There is a progressive increase in the amount of of subsidy provided by the
Government on account of agricultural consumption. The State has a consistent record
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