Power losses rise despite huge spends

Thousands of crores spent on reducing aggregate technical and commercial losses of state electricity boards have not had any impact on the rising losses.

Countrywide AT&C losses have increased to 34.54 per cent in 2005-06 from 34.33 per cent in 2004-05, mainly due to an increase in AT&C losses in the western region from 34.58 per cent to 36.88 per cent.

According to the annual score card of power utilities released by Power Finance Corporation recently, the losses have increased by over 4 per cent in Chhattisgarh, Arunachal Pradesh, Maharashtra and Karnataka.

Uttar Pradesh, Rajasthan and Haryana have reported AT&C losses of over 40 per cent. At 23.73 per cent, the southern region continues to report the lowest AT&C  losses.

States which have reduced their AT&C losses in 2005-06 include Rajasthan, Jammu & Kashmir, Gujarat, Orissa, Andhra Pradesh, Assam, Delhi, Madhya Pradesh, Uttaranchal, Mizoram and Manipur. Madhya Pradesh registered the highest reduction, from 54.27 per cent to 39.69 per cent, due to improvement in collections.

In terms of finances, the worst performers are Bihar, Tamil Nadu, Jammu & Kashmir and Uttar Pradesh. These states' losses have more than doubled over the last two years -- from Rs 3,453 crore (Rs 34.53 billion) in 2003-04 to Rs 7,219 crore (Rs 72.19 billion) in 2005-06.

Experts said the increase in losses could be due to subsidised or free power given for agriculture and the high fuel cost. Also, states neither carry out energy audits nor check power thefts, said a power expert.

On the other hand, the aggregate profitability of 26 states (excluding Uttar Pradesh, Bihar, Tamil Nadu and J&K) has shown a marked improvement.

Delhi has shown remarkable results after privatisation, both in terms of reduction in AT&C losses and financial stability. The Delhi discoms, BSES and NDPL, have invested over Rs 4,000 crore (Rs 40 billion) in improving infrastructure since 2002. Of this, BSES, an ADAG-promoted company, has invested over Rs 2,900 crore (Rs 29 billion) and NDPL, a Tata group company, Rs 1,200 crore (Rs 12 billion).

The Delhi government used to give an annual subsidy of over Rs 1,200 crore to the erstwhile DVB. Experts say despite unbundling the SEBs, the states show varying performance because they don't run these unbundled entities professionally. Only 13 states out of 22 that have SEBs have unbundled the boards.