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

Synopsis of State Reports (Vol.-IV)
Study on `Impact of Restructuring of SEBs’
increase in the subsidy provided by the State Government. From Rs 532 crore
in 1999-2000, the subsidy support has grown three-fold and reached a level of
Rs 1,686 crore in 2006-07.
2.4.3 Commercial Viability
Receivables
The amount of receivables has been increasing substantially for both the
DISCOMs. While it was pegged at around Rs 1,119 crore for the two
DISCOMs as on 31 March 2000, it shot up to Rs 2,852 crore by 31 March,
2005. The disturbing trend in the matter of receivables of UHBVNL is that
agricultural and domestic categories together accounted for about 82 per cent
of the total arrears that got accumulated in this period.
Financial Gap in Distribution Sector
While the ARR is met through revenue from sale of power and subsidy
available from the Government, however, under-performance by the DISCOMs
to recover the revenue billed leaves a huge gap in the sector. The financial gap
in the distribution sector on subsidy received and revenue realised basis has
almost doubled from 16 paise per unit in 2002-03 to 25 paise per unit in 2004-
05 for DHBVNL and from 17 paise to 48 paise for UHBVNL during the same
period.
Financial Position of the DISCOMs
The financial position of the DISCOMs has not improved even after the full
cost of service tariffs has been allowed by the Commission and full subsidy
amount provided by the State Government. However, in an isolated instance
(2003-04), the DISCOMs had shown a profit of Rs 70 crore. This was partly
attributed to the truing up of power purchase cost from Faridabad Gas Power
Station, which led to a refund from NTPC of the already paid cost by the
consumers. The overall trend shows that the losses of DISCOMs have
increased to as high as Rs 396 crore. The distributions sector, even after
investments of more than Rs 1,150 crore in the last six years, has still to show
any significant achievement in any of the key areas. The customers have also
not got a better deal. Consumer Grievance Redressal Forums too have not been
set up in the State.
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