Haryana power distribution utilities loss at Rs 30,000 cr in FY15

Excess of working capital borrowing by discoms and huge gross outstanding receivables are the reasons for the ailing power sector in Haryana

Power distribution companies in Haryana have an accumulated loss of Rs 30,000 crore in the 2014-15, according to a white paper on the state’s finances released on Saturday.

In 2004-05, the loss was Rs 1,030 crore. According to the Haryana power department, the gross outstanding receivables of the state discoms have been pegged at Rs 4,904 crore for 2013-14.

Chief Minister Manohar Lal Khattar released the white paper — the second evaluating the financial health of the state.

Excess of working capital borrowing by the discoms and huge gross outstanding receivables are the reasons for the ailing power sector. The power utilities have been in the red for the past few years. Haryana is one of the seven states that the Centre has chosen for financial restructuring.

One of the main reasons for the ailing power sector is that from 2001 to 2012 is the disparity between the rise in the cost of power and revision of tariff. While the power cost in Haryana increased by 300 per cent, the tariff was revised by only 50-60 per cent, creating a huge gap between the average revenue realised (ARR) and average cost of supply (ACS).

The transmission and distribution losses in the state are to the tune of 30 per cent. The obsolete distribution network does not provide a foolproof mechanism to bring down the losses but anything above 15 per cent is alarming.

Also the difference between ARR and ACS need to be brought down through a gradual revision of tariff.

Finance Minister Abhimanyu Singh told Business Standard coming out with a white paper a few days before the Budget doesn’t mean the state is bankrupt and cannot afford to pursue welfare measure. But the government wants to ensure transperancy in the process.

He added the previous government did not take measures to cut the transmission and distribution loss and aggregate technical and commercial losses.

“The outstanding of the discoms being Rs 4,904.28 crore indicates that power theft, non-billing, incorrect billing, inefficiency in collection and leakage in transmission and distribution were rampant for past many years.”

The minister also said this was a problem that could be and would be tackled.

“We have decided to provide power round the clock to villages. More such incentives are in the pipeline. Stringent enforcement laws would also ensure higher revenue realised,” he said.