thermal power development - Infraline

Central electricity authority Annual Report 2009-10
Year-wise Commercial Losses of
Power Utilities
Year
Losses (Rs. Crores)
2001-02 29331
2002-03 21245
2003-04 19107
2004-05 23995
2005-06 20869
2006-07 27101
2007-08 31862
Source: PFC Reports on the performance of the State
Power Utilities.
9.1.3 Settlement of Dues
The gap between average revenue
realization and average cost of supply remained
constantly high causing erosion over the years
in the volume of internal resources generation
by the SEBs and led many of them to virtual
bankruptcy. The level of commercial losses of
the SEBs/ utilities depended inter-alia on the
unaccounted energy losses, effective subsidies
incurred towards sales to agriculture and domestic
sectors, efforts to neutralize them through cross
subsidization and the level of subventions
provided by the State Governments. Gross
subsidy on energy sales had been increasing over
the years because of the policy of some of the
States to provide electricity at subsidized rates to
agriculture and domestic consumers.
Consequently, SEBs were unable to make
full payments to Central Power Sector Utilities
(CPSUs) for purchase of power and coal
resulting in accumulation of huge outstanding
amount to be paid by SEBs to CPSUs. This
adversely affected the growth and performance
of CPSUs. This payment deficit continues to rise
and threaten the viability of the Central Power
Utilities. Poor creditworthiness of SEBs also
effectively blocked investments by the Private
Sector despite the enabling and encouraging
framework laid down by the Centre. Even
in the post reform period, managerial and
financial inefficiency in the State Sector utilities
adversely affected capacity addition and system
improvement programmes.
In pursuance of the reforms process, the
Expert Group constituted by the Government
under the chairmanship of Member (Energy),
Planning Commission recommended a scheme
for one-time settlement of dues payable by the
SEBs to CPSUs and Railways. This one-time
settlement scheme (launched on 5 th March,
2001) of dues owed by SEBs/Utilities to CPSUs,
was aimed at making loss-making power
utilities bankable. In terms of the Scheme, 60%
of interest/surcharge on the delayed payments/
dues as on 30.9.2001 was waived and the rest of
the dues were securitized through tax-free bonds
issued by respective State Governments.
Considerable progress has been made
since in the settlement of dues payable by
SEBs to CPSUs and the Railways. All State
Governments signed the Tripartite Agreement
envisaged under the scheme, which was
between the State Government, Reserve Bank
of India and the Government of India. Out of
these, 27 States have issued bonds amounting
to Rs.31,581 crores. Goa had no outstanding
dues. The Government of the National Capital
Territory of Delhi securitized its outstanding
dues by converting their dues into long-term
advances of Rs.3,376 crores payable to the
CPSUs concerned separately under Bi-partite
Agreements, as they do not have the power to
issue bonds.
9.1.4 Trend in Outstanding Dues to CPSUs
by SEBs/Utilities
CEA has been monitoring the status of the
outstanding dues payable by SEBs to CPSUs.
The total dues outstanding to various CPSUs for
the period 2002-03 to 2009-10 are given in the
table below:
“Energy Saved is Energy Generated”
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