AP electricity board’s woes continue

To overcome the difficulty, the Board is likely to approach the Tariff Regulatory Commission (TRC) once it is set up as part of the power reforms this year. The TRC would come into effectwithin three months of notification of the Power Reforms Act, 1998. The Act would be notified by the end of this month. "Once the wage agreement with employee is settled, there will be no hindrance to the Board restructuring and setting up of the TRC," an official said.

The Board was showing a negative trend , since 1989-90 with its cumulative losses reaching Rs 3,800 crore. The World Bank was also particular on the unviable cross subsidisation of tariff between the agricultural and industrial sectors. "To begin with, we wanted to effect some marginal hike in the tariff of the farm sector this time, but the government was firm on stalling the move as this is an election year," a senior board official said. Last week’s tariff hike did not bring the Board near the solution. But, the State feels otherwise. "Already we have given Rs 575 crore to the Board apart from a guarantee for Rs 500 crore towards its bonds. If you include all these, the total receipts by the APSEB would be about Rs 1,400 crore thisyear," an official said.

But, the APSEB contends that the book adjustments by successive governments since 1990-91 brought little relief. "Unless we make up the huge deficit immediately, the restructuring of the Board may not yield any results," said a member. The revenue deficit is expected to touch new heights due to the high cost of the power purchased from the independent power producers, which would be the chief source of power generation in the coming years.

If the cost at the APSEB’s Vijayawada Thermal station was was Rs 1.20 per unit and the cost at the modern units of Kothagudem station was about Rs 2.11, the cost of power generated by IPPs ranged between Rs 2.11 (GVK) and Rs 2.37 (Spectrum). In total, the Board paid Rs 543.37 crore for purchasing about 2,500 million units of power from different powerhouses. But, the Energy department refused to go by the argument. "Even the power supplied by the NTPC is very high compared to the private power," said a senior official. The APSEB decided toadd as much as 5,706 MW of power in the next three years. Of this, 3,846 MW comes from IPPs and the rest from stations of APSEB or from the Central stations. If the burden of IPPs was acute at their share of 389 MW, it would be more at 892.27 MW.

Barring the old stations with a high rate of efficiency, the unit of cost of power generated at most of the IPP stations would be crossing Rs 3 by the next year. If that comes by, the farm sector is unlikely to be insulated from the onslaught anymore, an official said.