12 states reduce power losses by Rs 11,817 crore

Twelve states, led by Tamil Nadu, Andhra Pradesh, Gujarat and Maharashtra, claim to have reduced losses in their power sector by Rs 11,817 crore over the last two financial years.

According to provisional data submitted by states to the Centre, the states have managed to bring down losses by strengthening their distribution sectors, improving consumer metering and maximising the number of people in the billing net.

One of the factor that links the 12 states is that they have constituted State Electricity Regulatory Commissions (SERCs) to manage the power sector. Also, in most of these states the regulators have issued two or more tariff orders.

Among the other reasons that link the states is their focus on stemming the losses at the industrial consumer end, the traditional cash cows of the State Electricity Boards (SEBs).

Individually, however, there are reasons specific to some states, which have resulted in losses coming down. For instance, Tamil Nadu and Punjab have started levying tariffs for supplying electricity to farmers, who were earlier being supplied power free of cost.

Maharashtra has reported a loss reduction over the last two years largely because it stopped buying high cost power from the Dabhol project.

The power ministry is presently scrutinising the data, which is yet to be audited, for giving out funds to states under the matching grants provision of the Accelerated Power Development and Reforms Programme (APDRP), where states get grants commensurate to the loss reduction managed by them during a financial year.

"Reduction of losses in some states is a very encouraging sign," Power Secretary R V Shahi said. The maximum reduction of losses over the last two years has been shown by Tamil Nadu, which claims to have reduced its losses (without subsidy) by Rs 3,122.38 crore during the last couple of years. Maharashtra comes next, with a cumulative loss reduction of Rs 2,213 crore during 2001-02 and 2002-03.

Other states that have reduced losses over the last couple of years include Gujarat, which has projected a cumulative loss reduction of Rs 1,842 crore during 2001-02 and 2002-03, and Andhra Pradesh at Rs 1,123 crore.