The Hindu Business Line : Discoms’ troubles

New Delhi, Jan. 27 The reported admonition of the Delhi Government Power Minister, Mr A.K. Walia, to the power distribution companies (Discoms) that power cuts in the city, being the Capital of the country, would not be tolerated after April 1, is understandable in the light of the run-up to the State Assembly election which is due in December, 2008.

No doubt, the Discoms have the responsibility to finalise power arrangements in advance for meeting the peak demand in the flinty summer when the load would be heavily drawn and they would have to keep in readiness supply of power from other States.

It is interesting to note that distribution of electricity has been privatised in the National Capital Territory of Delhi, Gujarat, Kerala, Maharashtra, Orissa, Uttar Pradesh and West Bengal. The Delhi Electricity Regulatory Commission (DERC) has notified performance standards. A perusal of the performance as compiled by Power Finance Corporation (PFC) for the period 2003-04 to 2005-06 does not provide any comfort.

Tariff after privatising

For instance in the case of Delhi, the percentage increase in the rates of electricity after involving private sector in power distribution for all three Discoms was none too encouraging. In the case of BSES Rajdhani Ltd, it was 45.73 per cent in 2003-04, 41.97 per cent in 2004-05 and 39.06 per cent in 2005-06. In the case of BSES Yamuna Power Ltd, it was 55.54 per cent, 51.70 per cent and 48.58 per cent respectively, while in the case of North Delhi Power Ltd it was 48.16 per cent, 35.90 per cent and 28.01 per cent respectively. But in the case of Orissa Discoms, the performance has been mixed with some improvement and fluctuations.

Performance statistics

Though no official statistics are available about the subsequent two years’ performance of Discoms in the Capital, the Discoms have not done badly either, considering the clean chit they had got from the regulator. The DERC conducted several meter testing drives, following complaints of faulty meter readings and inflated bills from consumers which were primarily due to the perception of consumers concerning the fast running electronic meters. But in 536 meters tested by the DERC in concert with the Central Power Research Institute (CPRI), Bangalore and the Bureau of Indian Standards (BIS), only four were found to be recording higher consumption levels than the stipulated norms.

Electricity Theft

The Electricity (Amendment) Act 2007 explicitly made theft of electricity a cognisable and non-bailable offence since theft of electricity is one of the major contributing factors for the financial sclerosis power utilities groan under frequently. The distribution licensees have been empowered to disconnect the supply of electricity upon detection of theft.

The penalty for repeated theft of electricity by large consumers has also been enhanced.

But how effective the provisions of the Act in the hands of Discoms particularly when the political dispensation does not deem it improper to regularise a raft of unauthorised colonies that draw power unobtrusively and without payment or in connivance with vested interests are a moot point?

Since the financial health of power utility is also one of the criteria for assessing the viability of new investments, the authorities should do well to ensure that power theft is effectively controlled so that the utilities are left with the wherewithal to make arrangements for power supply from other sources outside the state of Delhi.

Moreover, since 2005-06, there has been no further revision in power tariffs and nor there is going to be one in an election year when any hike in electricity charges would add to anti-incumbency factor. So instead of understanding the hardships being undergone by Discoms in the face of escalating power theft and no revision in power tariffs for the third year in a row, it would be inexpedient to assume minatory postures by the government of the day, private power companies say.