 "Tariff hike should be last resort: Scindia")
"As Minister of Power, Government of India, I think that hike in tariff should be the last alternative. There are a couple of other options that are available," Scindia told PTI in an interview.
Blaming high levels of Aggregate Technical & Commercial (AT&C) losses as a key reason for rise in tariffs, Scindia said there was a need for greater transparency and accountability on the part of distribution companies as well as the state governments to tackle the problem.
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AT&C losses, that includes losses incurred during electricity transmission and theft, are estimated at about 26.4% on a national average.
Scindia said AT&C losses have come down significantly in the last 4-5 years from the levels of 32-33%, but it still remains very high and need to be brought down to about 15% on a state level.
"The hike in tariff is largely happening because AT&C loss is very high. If states lower their AT&C losses, they will improve transparency, accountability, then the tariff revision to that extent will be much lower," he said.
The Minister, however, refused to intervene in the process of determining power tariffs, saying states were empowered to decide on tariff fixation.
"However, even states cannot hike tariff on their own and they need to petition the State Electricity Regulatory Commission (SERC), which has got the authority to decide.
"The states generally present their 'Average Cost of Supply' and 'Average Revenue Realisation' before the Commission and seek a tariff hike to bridge the gap between the two. But the decision is taken by the SERC," Scindia said.
"The reason why this authority (SERC), which have quasi judicial powers, has been established is to avoid any political or government interference in the process," he said.
"If you want me to interfere in what the SERCs and CERC does, then better disband them. We are trying to create autonomy and independence in the system so that there is rigour, transparency and accountability. Which is why the states have to petition the SERCs," Scindia said.
Last year, many states including Tamil Nadu and Rajasthan had raised power tariffs, while there are such proposals in other parts of the country as well for higher electricity charges.
Scindia said some states like Andhra Pradesh and Haryana have low AT&C losses in the range of 10-11%.
"At the same time, there are states such as Uttar Pradesh and Madhya Pradesh, where it is upwards of 33-34%. So on a nationwide basis, if you are able to lower the AT&C losses down to about 15%, it would help check tariff hikes and to me power saved is power generated," Scindia said.
At present, the country's power generation capacity is around 2,28,000 megawatts.
"If we take an average of 70% PLF (Power Load Factor) across the board, we are talking about roughly 1,60,000 megawatts of actual generated power.
"On that if you put a 26% AT&C loss, straightaway you are taking off close to 40,000 megawatts. So actual generation is only about 120,000 megawatts. If I can save even 10,000 MW, 15,000 MW or 20,000 MW out of this 40,000 MW getting lost, that would be power generated to me," he said.