The Hindu Business Line : Accounting for power

The Power Ministry continues to grapple with a series of crises in the power sector. The problems are plenty — insufficient capacity, poor track record in adding generating capacity, inadequate investment in transmission networks, and a creaking and leaking distribution system, resulting in a high percentage of electricity being lost. Various initiatives, such as the Accelerated Power Development and Reform Programme, have tried to address the inefficiencies in distr ibution of electricity by offering States funds to spur them to act. Still, the aggregate technical and commercial losses continue to be high. The Union Power Minister, Mr Sushilkumar Shinde, has put the losses at a conservative 35 per cent and wants this cut to a more acceptable 15 per cent through an information technology-enabled accounting system that will provide a more accurate picture of the quantum of energy fed into a system and that which is billed and paid for. Even a figure of 15 per cent for line losses is high by international standards, but recognising that this is a serious problem and setting a target of five years to bring it down through computerisation is a first step in tackling this issue.

The biggest issue here will be in getting the States to computerise their electricity systems. The more progressive States have done so as far as the high-tension consumers are concerned. That is the easier part. The more difficult part, and one where the political leadership may be reluctant to act, will be in computerising the system for low-tension consumers. It is in the low-tension system that a higher percentage of loss occurs. State utilities manually reconcile the electricity that enters a system with what is paid for, and pass off the gap as due to line losses or unaccounted-for consumption. With an IT-enabled system in place throughout the country, the Ministry hopes to tackle this problem. Simultaneously, the Ministry should push the States to meter all connections, irrespective of whether they are charged for the electricity they consume or not. A fully computerised distribution system will also make the sector more attractive for private sector investment, as and when States decide to go in for this move.

The most difficult part has been in convincing the States to carry out reforms. Getting all of them to put in place an IT-enabled energy accounting system within the next five years — some of them have just started — will be a tough task. Prodding them and providing them the right incentives, of course with strict monitoring, should get them to act, as States realise that the power sector is the weakest link in the whole infrastructure sector and one that is most important for economic progress.

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