Tariff holds up power reforms

Torrent Power was to start operations in Agra by August and in Kanpur by September,but the process got delayed for multiple reasons. The reasons given so far were that the verification and audit of assets and accounts were taking time. Besides,there were meters to be installed at transmission sub-stations for measuring the power supplied to the franchisee.

Now,officials say the tariff at which power is to be sold to the franchisee is yet to be decided. “Transfer of power distribution to the franchisee is held up due to delay in the finalisation of the tariff at which the UPPCL will supply power to the franchisee,” said Sanjay Prasad,MD of the Dakshinachal Vidyut Vitran Nigam,a UPPCL-owned discom looking after power distribution in Agra and southern parts of the state. “Transfer of power distribution to the franchisee in Kanpur is held up for similar reasons,” he said,adding as and when the tariff is finalised,the power distribution in Agra will be handed over to the franchisee.

In the tender document inviting bids from the private sector,the UPPCL had said the average tariff being charged in Agra and Kanpur was Rs 2.82 per unit and Rs 3.52 per unit,respectively. In March,an agreement was signed between the TPL and UPPCL. Under the agreement,valid for the next 20 years,UPPCL was to sell power at levelised tariff of Rs 2.17 per unit in Kanpur and Rs 1.94 per unit at Agra. Under the levelised regime,tariff would be different for each year. In September,the Power Employees Joint Action Committee,however,challenged the average tariff quoted by the UPPCL in the tender document. The UPCCL then decided to conduct a fresh exercise for determining the average tariff rate being charged by the distribution companies (discoms) in both Agra and Kanpur. UPPCL has five discoms,which are its wholly-owned subsidiaries.

The UPPCL committee,in its interim finding,has concluded the average tariff being charged by the discom at Kanpur was above Rs 4 per unit,while it was Rs 4 per unit in Agra,claimed Shailendra Dube,the convener of the Employees Joint Action Committee. “UPPCL had deliberately quoted low rates of average tariff being charged by it in Agra and Kanpur. This is a scam of the highest order and until and unless the tariff is revised,we will not accept the handing over of the power distribution in Agra and Kanpur to the franchisee,” Dube said.

The UPPCL had embarked upon the idea of inviting franchisees in power distribution to cut down line losses and increase revenue recovery for its very survival as its accumulated losses had mounted to a staggering Rs 27,000 crore by March 2009.

The UPPCL was created in January 2000,after unbundling of the then UP State Electricity Board in 2000. The state government had then written off accumulated losses of over Rs 20,000 crore of the UPSEB. Against the national average of 30 per cent aggregate technical and commercial losses,commonly known as line losses,the line losses in Kanpur in 2008-09 were as high as 48 per cent while in Agra these were 40 per cent. The average per unit realisation of power consumed in Kanpur in 2008-09 was Rs 1.96 per unit,while in Agra it was Rs 1.65 per unit.