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| Plan panel proposes setting up of National Electricity Fund |
| Press Trust of India / New Delhi Apr 30, 2009, 14:18 IST |
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The Planning Commission has proposed setting up a National Electricity Fund with a corpus of Rs 1,00,000-1,50,000 crore to finance development of power transmission and distribution (T&D) network by state utilities so as to reduce T&D losses.
"We have settled all issues with the states and have firmed up a report, which would be sent to (the) Ministry of Power for setting up a National Electricity Fund with a corpus of Rs 1,00,000-Rs 1,50,000 crore," Planning Commission Member B K Chaturvedi told PTI. "The idea behind setting up this fund is to reduce T&D losses in the next three years to 15 per cent by setting up new electricity transmission lines, transformers, replacing overloaded lines and using new technology," he said.
Chaturvedi is heading a panel which was set up to submit a report on modalities for the National Electricity Fund's operations. In a meeting held on Wednesday evening, the report was given final shape. State-run Power Finance Corp and Rural Electrification Corp would be the nodal agencies to finance state utilities.
The agencies would raise around Rs 30,000-40,000 crore every year from the domestic market and financial institutions. The Government would help the agencies through interest subvention.
The Planning Commission also suggested that the support of World Bank and Asian Development Bank could be sought for the improving electricity transmission and distribution network in the country. Once the plan panel submits its report to the Power Ministry, it would seek necessary approvals from the Government for setting up the fund.
The biggest challenge before the power sector is huge transmission losses. As the T&D losses did not capture the gap between billing and collection, the concept of 'Aggregate Technical and Commercial' (AT&C) was introduced in 2000-2001 to ascertain the exact performance of the state power utilities.
A report of the Working Group on Power for the XIth plan submitted in February 2007, showed that AT&C losses range between 18 per cent and 62 per cent in various states. The average AT&C loss in the country is at 34 per cent. According to the report, one per cent reduction in T&D losses would generate saving of over Rs 700-800 crore and reduction of such loss to around 10 per cent would release energy equivalent to an additional capacity of 10,000-12,000 MW.
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