CERC bats for private participation in distribution

The Central Electricity Regulatory Commission (CERC) has batted for more private sector participation in distribution sector to reduce aggregate technical and commercial(AT&C) losses and to improve efficiency.

“Losses in distribution companies is due to huge inefficiency. More private sector participation is needed in the sector. In distribution, only 13 per cent comes from private sector, In Mumbai you have two players, Tata and Reliance, and in Kolkata you have CESC. More efficiency can be introduced in distribution through private sector participation,” said Pramod Deo, chairperson of CERC.

Citing examples of Delhi, Mumbai and Surat, he said, “In Delhi, AT&C losses were brought down from 52 per cent to 15 per cent. In Mumbai, it is 11 per cent and Surat it is less than 5 per cent. This shows more participation is needed from private players.” According to him, in last five years, the share of private sector has increased from 11 per cent to 23 per cent and with the number of power plant set to come up it would be almost 50 per cent by 2017.

He said even if there is no political will and the government which owns the distribution company is against an increase in tariff hike, the regulator can go-ahead with the tariff increase.

“Even if it against the government’s wish the regulator has to do it,” he said citing the recent example of Tamil Nadu where the tariff was increased by about 37 per cent.b The regulator also batted for separate feeder for agriculture sector.

“Agriculture sector is the major user and losess can be reduced if you keep separate feeder,” he said. Meanwhile,  he hinted that the new fuel supply agreements (FSA) may create problems for power firms.