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N. Ramakrishnan

Chennai , May 16

THE crisis in Maharashtra's power sector has lessons for all, according to the Union Power Secretary, Mr R.V. Shahi.

The first and most important one is to plan for capacity addition well in advance of demand.

Though the gestation period of power projects has come down, it still takes "up to four years, if not more" from the time a project is conceived to the time it goes on stream. That is why, he said, at the national level, the Ministry has started working on capacity addition during the 11th Plan Period, two years before the start of the Plan.

Mr Shahi, who was associated with Maharashtra's power sector for nearly eight years when he was in BSES Ltd (now Reliance Energy), before becoming the Power Secretary, said electricity boards need to assess their capabilities to put up power projects, based on resource generation and other factors.

Based on this exercise, if the electricity boards or utilities conclude that they will require outside resources, they then have to explore all options, including the private sector to create additional capacity.

When a State faces a serious mismatch between requirement and availability of power, it cannot afford to supply power free of charge. This inevitably leads to a sudden and sharp upsurge in demand because wasteful consumption increases.

Mr Shahi said larger electricity boards must think in terms of reorganising so that accountability for generation, transmission and distribution do not get mixed up. "It has been seen that in those States that have created exclusive organisations for power generation, this aspect has been given greater attention with rewarding results," he said. He cited the examples of Karnataka Power Corporation, Andhra Pradesh, West Bengal Power Development Corporation, Rajasthan Power Generation Company and Haryana Power Generation Co.

Maharashtra's decline, Mr Shahi said, started with its preoccupation with the Dabhol power project. "Unfortunately, that took a lot of time, both during and after development of this project." It was unfortunate, he said, that the State depended on this project - almost 2,100 MW - and that capacity was not available now.

However, he said, at the highest levels - the electricity board, the political and bureaucratic levels - the problem has been recognised and action has been initiated.

Free power to farmers has been withdrawn. The State Government has decided to take immediate steps for capacity addition. It has signed agreements with eight private power companies. The Government is now preparing to float tenders for project development on the basis of competitive bidding for tariff.

The Maharashtra Government had informed the Power Ministry that it would issue tenders to identify project developers in the next few weeks, Mr Shahi said.

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`Lessons to be learnt from Maharashtra power crisis'

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