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Roadblocks hit power sector reforms in Haryana
The power utilities of Haryana have drawn an ambitious plan to reform the power sector with the central assistance but in-house efforts are being torpedoed on political grounds.

The reforms in the power sector undertaken by utilities are nullified as under political interference utilities are unable to check the theft of power and recover the defaulting amounts. In Haryana AT&C losses are in the range of 20 to 30% in urban domestic feeders and 50 to 70 % in rural areas and the main component of these losses comprises of commercial losses which is the direct fallout of theft of power.

In Haryana where the local politicians ask the people to go for Kundi connections and not to pay electricity bills, under such circumstances how the power utility can financially survive. Haryana is unable to recover defaulting amounts because political forces do not permit the disconnection of defaulters. Without disconnection the arrears cannot be recovered.

While section 135 of the Electricity Act 2003 contains stringent provisions dealing with theft of electricity and Sec 170 gives sweeping powers to recover dues as arrears of land revenue these statutes remain on paper.

Haryana has opted for financial restructuring plan offered by government of India under which state government was to take over the liability by directly issuing bonds or infusion of funds for amount of 50 per cent of the liabilities calculated by March 31, 2012 and balance amount is to be adjusted by rescheduling the loans and availing incentives based on performance of utility in coming years. 

The Centre has also approved power development schemes worth Rs 1,487 crore for 36 towns in Haryana under Restructured Accelerated Power Development and Reforms Programme (RAPDRP).The power distribution system in 36 towns with population of more than 30,000, will be renovated and strengthened under this scheme.

 The implementation of the above schemes depends upon directly on how the AT&C losses are reduced in next three years. The power distribution losses has been assumed to be 25 % while AT&C losses has been mentioned as 28.38% in the tariff petition of 2014-15 submitted by power utilities  to HERC .

AT&C losses can be brought down to 10 to 15 % in city areas and 20 to 25 % in rural areas if the utilities are able to shift the meters of domestic consumers in urban and rural areas.

Northern India Power Engineers federation made a presentation before Defender Singh CMD power utilities and other senior officers where engineers have been  able to reduce AT&C losses in Punjab by shifting of meters outside the consumers premises  and strengthening of transmission system with the financial assistance of Government of India. 

In Punjab where overall  distribution  losses  which  were hovering around 25% five years ago, now have been brought down to around 16.5 % and the system reliability index has been improved to 99.75% along with reduced transformer damage rate.

Devender Singh CMD agreed to implement the pillar box scheme in Haryana after great discussions. The power utilities launched the pillar box scheme in parts of Haryana and have provided incentives to consumers opting for the scheme.

Now the local politicians misguide the consumers that by shifting meters outside their premises meters will run fast and they will have to pay hefty bills. Under such circumstances the scheme is getting lukewarm response.

The power utilities are to purchase 25 % extra power to supply the power required by the consumers. The power purchase cost increases by 25% under these circumstances leading to corresponding increase in tariff. The power purchase from state sector units and from outside is the major expenditure component and this amounts to Rs.10737 crore of total expenditure amounting to Rs.14405 crore. 

For the next financial year the utilities may not opted for tariff increase as it is  expected to fund revenue gap of Rs.2246 crore through available funding under Financial Restructuring Plan.

Another grey area is the non recovery of arrears of power bills amounting to around Rs 4,200 crore. The domestic consumers are the major defaulters and constitute around 80% of total consumers. The worst part of the problem is that most of the defaulters are getting regular supply with the help of local politicians.

The politicians assure these defaulters that the defaulting amount would be waived as was done 8 years back in 2005. Now they will be more encouraged by saying under pressure the state government has reduced their monthly bill by Rs. 100.

The bottom line is that Haryana Discoms cannot be revived just by fresh loans or restructuring of loans unless the utilities adopt a policy of zero tolerance to corruption, theft of power and  defaulters who continue to consume power without paying for it.

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 merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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Vibhav Kant Upadhyay
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