Odisha drops corpus fund plan for rebuilding power infra after disasters

State government had initially planned to raise fund from power distribution companies

The state government’s plan to create a corpus fund for rebuilding power infrastructure in the aftermath of Phailin-like disaster has been shelved with the power regulator, Odisha Electricity Regulatory Commission (OERC) rejecting the proposal.

The government had planned to raise the fund with contribution from power distribution companies (discoms), which, in turn, intended to pass on the burden to the consumers. They had applied to OERC for hike of at least five paise per unit in the power tariff to arrange their contribution to the fund.

However, since the regulator recently kept the tariffs unchanged, the government had to drop the proposal.

 “The OERC has shot down the plan for a corpus fund by refusing to hike the tariff rate. So it is now decided that the state government will bear the cost of rebuilding power infrastructure in case of storms and cyclones and not the discoms,” said a senior official of state energy department.

 The idea to form a corpus fund for expenses incurred after natural calamities was mooted after state Energy Department and Southern Electricity Supply Company (Southco) clashed over expenditure on  restoration work for Phailin-related damage in Gajnam district, the catchment area of the Reliance Infrastructure operated discom.

While the state government maintained that the discom must bear all the cost as it has been operating the properties since 1996, when power distribution network was privatised, Southco objected to it saying the company cannot spend money on destruction caused by natural force.

Therefore, an idea of a corpus fund was mooted in the line of the existing Capex fund, where every stakeholder—the discoms and the state government—would have contributed money for post-disaster restoration work.  

Cyclone Phailin had battered nearly 1,600 km of 11 KV lines in Ganjam district while 241 km of 33 KV lines were badly damaged. The rebuilding exercise included replacement of 300 distribution sub-stations and 54 extra high tension towers. Besides, 13,000 km of low tensions lines had to be repaired.

To expedite the rebuilding process, the state government had roped in manpower from companies like L&T, Tata Steel and KVK Energy. It had also sought the assistance of Central public sector units like Power Grid Corporation of India Limited (PGCIL), National Hydro Power Corporation (NHPC) and NTPC Ltd to speed up the work.

In total, the damage caused by Phailin to power infrastructure was estimated at Rs 1,000 crore in Ganjam district.

In the entire state, Phailin damaged 1,796 feeders and affected 41,152 sub-stations. In addition, it affected 37,912.2 km of low tension lines, 4074 km of extra high tension lines, 408,360 electric poles and 93 extra high tension towers.

The damage to electrical infrastructure impacted 3,914,714 consumers in 45,616 villages and towns.