Positive step but MSEB has to deliver

The Congress-NCP government in Maharashtra has finally scrapped its populist policy of extending free power to farmers but that does not mea...

The Congress-NCP government in Maharashtra has finally scrapped its populist policy of extending free power to farmers but that does not mean an end to power cuts in the state.

The free power policy had in fact led to a runaway increase in consumption: over 13,000 MW.

Speaking to The Indian Express, Union Power Secretary R V Shahi admitted that the power crisis in Maharashtra was a result of such freebies and that the state had failed to add any significant capacity over the last five-six years.

Though it makes great economic sense, the decision to scrap free power can at best bring down the demand by around 1,200 MW. It will not help the state to tide over the power shortage of 4,000 MW.

The bigger problem confronting the state is low utilisation of existing power capacity—a crucial, but less-talked-about factor behind the extended spells of power cuts.

Maharashtra, which has the highest power capacity in the country, is ‘‘declaring’’ around 11,000 MW capacity as against a potential of 14,000 MW. This is inclusive of the Maharashtra State Electricity Board’s (MSEB) own capacity, share from Central sector stations such as NTPC, NHPC and private producers such as the Tatas and BSES but excludes 740 MW of Dabhol.(See chart)

Had the MSEB been able to increase its utilisation by even 10 per cent, power shortages in the state would come down drastically. Shahi said that ‘‘this issue (of low utilisation) was discussed yesterday (Monday),’’ and added that lack of adequate fuel in Maharashtra is a factor responsible for the low level of utilisation.

Gas-based power stations such as Uran (800 MW) are facing such shortages, he said. On some days Uran has been forced to ‘‘declare’’ half its capacity. It’s not just the gas stations, the state’s hydel capacity utilisation was about 55 per cent during the first week of May. MSEB’s declared-to-installed-capacity ratio is way below the Tatas’ close-to-100-per-cent mark. Unlike MSEB, the Tatas are in a position to utilise their full capacity to meet the demand for power.

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The freebie which helped the Congress-NCP combine ride to power nine months ago has cost the state exchequer dearly. Over the last nine months, the state government paid MSEB about Rs 1,400 crore on this account. More importantly, the free power supply has increased the demand for peak power to about 13,000 MW as against a demand of around 10,000 MW two years ago.

The Union Power Ministry last year projected that the state would face shortage of a record 8,700 MW by the end of the Tenth Plan period. Going by utilisation trends, power cuts are there to stay for some years.