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Haryana's ailing power sector and the reasons behind it
The Haryana's power sector faces numerous problems which include excessive dependence on power purchase to meet the power requirements of state, forced outage of state thermal units, lack of political will to curb the menace of power theft and to improve the working of Discoms.
The Haryana Government has decided to set up two 800 MW super critical thermal units at Panipat in place of old four units of 110 MW each and is working to replicate multi-benefit model of renewable power generation of Gujarat by using canal tops and canal banks as potential solar power plants. The proposed capacity addition steps are welcome but under utilization of existing thermal units is a cause of worry.

Last year the maximum power supply on a single day was 1828 lakh units and maximum demand crossed 8370 MW. In the coming summer months power demand may touch 9000 MW with the assumption of about 8 to 10% increase. The Discoms hope to meet the requirements with the help of power purchase agreements. The utilities have reportedly supply tied up this year around 9500 MW to maintain round the clock supply in major cities.

Haryana has three thermal plants in state sector at Khedar (1200MW), Yamuna Nagar (600MW) and Panipat (1380MW). Besides these state has 90% share in CLP thermal plant at Jhajjar (1320 MW) and 50% share in NTPC plant at Jhajjar(1500 MW). The thermal plants at Yamuna Nagar and Khedar suffered major breakdowns allegedly due to poor quality of Chinese equipment. The turbines rotors of units were sent to China for repairs leading to forced outage of units.

According to Central Electricity Authority data the plant load factor (PLF) during 11 months of last financial year for Panipat thermal was 40.13%,for Khedar thermal it is 58.47% and for Yamuna Nagar it is 69.32%. In case of non HPGCL plants PLF for 1320 MW China light and Power is 55.27% and for NTPC 1500 MW Aravali it is 53.96%. It is certain that private sector thermal plants must have declared high availability and recovered capacity charges accordingly.

Haryana availed the financial restructuring plan (FRP) of Government of India under which all the loans and liabilities of distribution companies as on March 31, 2013 were transferred to Government of India and state government. The Discoms are supposed to reduce aggregate transmission & commercial (AT&C) losses and to improve its overall performance in a phased manner.

Under this plan, debt on account of short-term liabilities amounting to Rs. 7,366 crore has been committed to be taken over by the State Government against which bonds have been issued by the Discoms on behalf of the State Government. The Government has also committed to pay the interest on these 10-year bonds, which is about Rs. 721 crore annually.

The Banks have restructured the balance amount of the loan of Rs. 7,396 crore. But the Discoms continue to show a clear trend of inefficiency of management, a poor financial state and as a result a drain on the State's resources though they are given a 'cost plus' operational framework

The poor performance of Haryana Discoms is the direct result of very high transmission and commercial (AT&C) losses and defaulting amount in the most political sensitive districts. The overall AT&C losses in Haryana are in range of 29.42% but in the politically sensitive areas these losses are more than 40%. The worst affected areas are rural areas where these losses exceed the limit of 50% in most of the villages. The AT&C losses touch more than 70 % in rural domestic feeders of this political sensitive circle.

The lack of political will is the main reason for the failures of power sector reforms in the state. The Discoms of Haryana adopted Punjab's pillar box scheme to reduce the AT&C Losses. In this all the domestic meters of the consumers are to be shifted on poles outside the premises of consumers so that there is no easy way out to resort to power theft. The power theft in rural areas exceeds 60% on majority of rural consumer feeders (RCF).

The pillar box scheme has been practically shelved after a scam was detected in Faridabad circle while implementing the scheme. The scam involved all the persons from top to bottom as everyone was interested in easy money.

In case of Uttar Haryana Bijli Vitran Nigam the distribution losses in 2012-13 were 32.47% and these have been increased to 33.41%. Similarly in case of Dakshin Haryana Bijli Vitran Nigam the losses have increased from 24.09% to 25.08% during the corresponding period.

According to official sources in case of Jind, Bhiwani, Rohtak and Kaithal circles AT&C losses are in range of 48%, 44%, 43% and 40 % respectively. There are 15% AT&C losses on agriculture feeders. The performance of less sensitive political areas like Ambala, Yamuna Nagar, Kurukshetra, Karnal, Panipat Sonepat Faridabad and Gurgoan circles is commendable.

In urban areas the major power theft is resorted in government residential colonies, and powerful individual persons.

For the last two years the performance of state run thermal plants has gone down due to forced outages of units to adjust the power purchase of 1424 MW from Adani's Mundra power station in Gujarat. The power supply to state has been affected after the Adani stopped the power supply to Haryana on commercial consideration despite clear cut long perm power purchase agreement.

The private sector generating companies are not following any rules and are operating thermal plants as per their will. Their only aim to maximize the tax free profits by exploiting the loop holes in power purchase agreements. State sector thermal units are being shut down on forced outage to pave way for the private sector generation.

The state run thermal plants have not been able to moderate targets set by central Electricity Authority for the last few years. Firstly it was the forced outages of thermal units at Yamuna Nagar and Khedar where the trouble was with Chinese made equipment. The units were on long forced shut down after turbine vibration problems were detected and rotors were sent to China for repair as there is no base repair workshop of Chinese equipment in India.

During last one year the state government has taken fresh loans amounting to Rs. 8069 crore to strengthen the transmission and distribution network of the state yet the overall distribution losses in Haryana have increased from 28.75% to 29.46% in one year due to half hearted approach of companies and absence of political will to tackle the problem of power theft.

In case of DHBVN the defaulting amount has increased from Rs. 2988.01 crore to Rs.3411.93 crore in one year .The increase of more than 414 crore of defaulting amount in one company shows no serious attitude of government to improve the overall performance of distribution companies. Even the defaulting amount in UHBVN has increased from Rs 1564.17 crore to Rs 1568.80 crore despite efforts made by the engineers of company.

Jind circle tops the list of defaulting amount with Rs. 898 crore followed by Bhiwani with defaulting amount of Rs. 533 crore. The other major defaulter circles are Hissar and Rohtak with defaulting amount of Rs. 456 crore and Rs. 397 crore respectively. In case of DHBVN the total defaulting amount is Rs 3411.93 crore and for UHBVN this amount is 1568.80 crore.

Even in case of collection efficiency Jind and Rohtak are worst circles.

Discoms have an an accumulated debt of Rs 28199 crore in the 2014-15. The accumulated debt of both companies together increased 1900 percent from Rs. 1,458 crore to Rs. 28,199 crore in last ten years. Out of this Rs. 3,487 crore of debt has been used for creation of assets and the remaining Rs. 24,712 crore has been used for operational financing and deficit financing on account of losses

The outstanding dues of the Discoms amounts to Rs 4,904.28 crore indicates that power theft, non-billing, incorrect billing, inefficiency in collection and leakage in transmission and distribution were rampant for past many years. A number of incentives announced by Government to consumers who clear their pending bills have not yielded any result.

Excess of working capital borrowing by the Discoms and huge gross outstanding receivables are the reasons for the ailing power sector. The power utilities have been in the red for the past few years.

The official reason for the ailing power sector claims that disparity between the rise in the cost of power and revision of tariff. While the power cost in Haryana increased by 300 per cent, the tariff was revised by only 50-60 per cent.

This reason may be partially true only as tariff in Haryana are comparable to any state of the country. The lack of political will to recover the arrears and inability to streamline the working of Discoms are the other reasons. It is high time that focus of government should be on improving the working of power utilities and reduce dependence on power purchases.

(V K Gupta is spokesperson for All India Power Engineers Federation)

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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