T and D losses by state power utilities still high study shows

New Delhi, June 25: A joint study by Crisil and ICRA brings out the high continuing Transmission and Distribution losses being incurred by states with these being as high as 40 per cent, making a mockery of the power sector reforms.

Among the states where Aggregate Technical and Commercial (AT&C) losses are in the region of 40 per cent are Delhi, Uttar Pradesh, Bihar, Jharkhand, Madhya Pradesh, Arunachal Pradesh, Manipur and Nagaland, the report prepared by the two credit rating agencies and submitted to the Union Power Ministry says.

Losses in distribution of between 30 and 40 per cent was reported from Karnataka, Kerala, Asom, Rajasthan, Haryana, Meghalaya, Chhattisgarh and Mizoram.

In the third category of states showing 20 to 30 per cent losses were those of Andhra Pradesh, Gujarat, West Bengal, Himachal Pradesh, Maharashtra, Tripura, Punjab and Uttaranchal, the report adds.

Only Goa and Tamil Nadu were the two states having less than 20 per cent losses.

Analysts say that critical to power sector reforms is that consumers must pay user charges for power utilities. It thus follows that free distribution of power or its theft are a negation of this principle. The high T and D losses are reflected in the phenomenal deficits of the state electricity boards.

Not mincing words, Power Minister Sushilkumar Shinde has taken a dim view of the losses and asked how could states justify losses in some cases of 50 per cent of electricity.

Citing figures, the Minister said while states like Bihar, Jharkhand, Orissa and Uttar Pradesh reported more than 50 per cent loss, the instances of Tamil Nadu, West Bengal and Punjab (having less than 25 per cent loss) were encouraging as these states proved that the losses can be reduced. Official sources said the Minister had at a recent meeting of State Power Secretaries urged them to take the lead in reducing losses which would help to improve financial condition and perhaps contribute to capacity addition.

Bihar, a laggard in the power sector, was yet to start power reforms in a significant way. According to the report, it had not passed any comprehensive legislation for reforms or formulated any FRP/restructuring plans for the Bihar State Electricity Board (BSEB). Worse, data on most T&D and commercial parameters were not available and was estimated at more than 40 per cent during the period under consideration, the report adds.

In Uttar Pradesh, the UPPCL continued to suffer from high T&D losses and poor collection efficiency which resulted in high AT&C loss of around 40 per cent. In fact, AT&C loss had in fact worsened in financial year 2005.

In contrast, among the better performing states, Goa had an enviable track record in terms of electrification both at the household level as well as in terms of rural electrification. On the latter front, Goa was among the few states to have achieved 100 per cent rural electrification, the report notes.

Goa's AT&C loss level was quite low at 16 per cent, down from 23.5 per cent reported last year. This was largely due to 100 per cent consumer metering and a collection efficiency in excess of 100 per cent in financial year 2004-05.

UNI