Power reforms, a long way to go

Bangalore, Mar 19 (UNI) Power reforms in the country remain only in paper and no real change will take place unless competition is infused into the sector and consumers are forced to pay the cost of power purchased by the distribution companies, Karnataka Electricity Regulatory Commission Chairman K P Pandey has observed.

In an interview to UNI, Mr Pandey, who had initiated reforms in the sector, said ''We have a long way to go as far as reforms are concerned. Reforms are yet to take off,'' he added.

Stating that the Commission was not against government offering subsidy to the needed sector, he said that though currently only the farm sector was enjoying government subsidy, this should be a targetted one with assistance provided only to those in need. Cross subsidy also might not last long as a schedule had been worked out to phase it out by 2012.

Regretting that the electricity supply companies were functioning as ''extended arms'' of the Transmission Companies, Mr Pandey said that meaningful reforms could take place only when the distribution companies face competition with multiple players in the field and the consumer had the final decision to chose his power supplier.

Mr Pandey, who was former Principal Secretary for Power in the state, said that until the supply companies were financially viable and pay for the power they purchase, the reforms would not succeed and the power shortages would continue as no generator would increase capacity with the utilities defaulting in payment. The government should also improve the managerial skills of the supply companies, he added.

Referring to the Karnataka scenario, he said the Electric Supply Companies (ESCOMs) were currently functioning on the directions of the Karnataka Power Transmission Corporation Limited (KPTCL) without having any commercial interest of their own.

Pointing out that the top management of ESCOMs were loaded with officials from the KPTCL and even transfers of ESCOMs was decided by KPTCL, Mr Pandey said the Supply Companies should work on commercial interests and be allowed to function independently without directions from other quarters.

At the same time, Mr Pandey said privatisation was not a panacea to the ills faced by the sector. It would only lead to private sector monopoly from government monopoly. The only way would be to have multiple players in distribution sector to infuse competition and allow suppliers to determine their tariff.

Lauding the state government for allowing the Commission to function in an independent manner, Mr Pandey said that ever since he took over as Chairman of the Commission more than a year ago, there had been no government interference in its functioning and the necessary finances were being released. However, the government's help and support was needed to enable the Commission function more effectively, he added.

Citing an instance, he said the state government had asked the power utilities in the State not to implement an order of the Commission seeking them to charge the consumers enjoying subsidy directly, if the Government had failed to pay in advance the subsidy amount every quarter. While Andhra Pradesh and Tamil Nadu enforced similar orders, the Karnataka government had asked the power utilites not to do so.

He said farmers in Karnataka were paying only 40 paise per unit for irrigation pumpsets, while the average cost of purchase by ESCOMs amount to Rs 1.88 per unit and the average cost of supply stood at Rs.3.55 per unit. There were as many as 1.6 million irrigation pumpsets in the State and each of them were charged on an average consumption of 6200 units per year at the rate of 40 paise per unit.

He also informed that as many as 2.5 lakh irrigation pumpsets were unauthorised and were causing a huge drain on the revenue of the power utilities. Unless the government was firm in enforcement and punitive measures on those erring consumers, the power utilities would not get their due revenue, he said.

While the Tamil Nadu government was firmly behind the power utilities, in Karnataka the situation was on the reverse. He also called for metering of power used by the agricultural sector to know the exact consumption level and avoid thefts and save losses by six to seven per cent.

UNI