Power reforms saved state Rs 1,000 cr a year, says govt

Countering the criticism of failed power sector reforms in Odisha, the state government today said the measures taken to improvise power distribution system has resulted in saving of about Rs 1,000 crore per year.

"When OSEB (Odisha State Electricity Board) was disbanded, it used to get a grant of Rs 250 crore per year then. Considering the power purchase costs and demand today, it works out to Rs 1,000 per year. So we have been able to save this much money by privatising the sector," said Pradeep Kumar Jena, state energy secretary at a seminar organised by the Odisha chapter of Federation of Indian Chambers of Commerce and Industry (FICCI).

Odisha was the first state to privatise power sector in the country, by segregating power generation, trading and distribution business way back in 1996. Out of four power distribution companies (discoms), three are managed by Reliance Infra while the fourth one, Central Electricity Supply Utility (CESU) is currently run by Odisha Electricity Regulatory Commission (OERC).

The state has also pioneered in micro privatisation of the sector, where discoms are allowed to award power distribution franchisee licence to firms for collecting bills and for providing customer support.

Despite these steps, power supply and distribution scenario in the state continues to face difficulties, as discoms failed to curb transmission losses and collect electricity bills, resulting in poor financial health.

Realising that the discoms cannot upgrade the existing power transmission network, the state government recently announced a Rs 2,600 crore plan to build 500 substations across the state from its own revenue.

The government also flayed the Centre's policy disqualifying Odisha from Central grants based on the premise that it had privatised its power sector.

"Odisha is debarred from all schemes of the Centre because we have privatised the power sector. It appears as if we have done a mistake by allowing reforms," said Jena at the seminar titled 'Efficient Sector-Mature Economy'.

"One of the reasons why the state has power supply problem is that the discoms are relying on load shedding and are not willing to buy costlier power from NTPC," said V S Verma, a representative of Central Electricity Regulatory Commission (CERC) at the seminar, hinting at the opposition of Odisha to price pooling of coal and power generated out of it.

The state has been protesting the use of domestic and imported coal in NTPC power plants, citing that it would escalate generation cost despite the fact that Odisha possesses abundant coal reserves, which accounts for 25 per cent of total deposit in India.

"There has been no change in our views (regarding price pooling)," said Jena.

NTPC supplies nearly 1000 Mw power to the state grid, out of total power availability of 2,600 Mw in the state, from its various plants located inside and outside Odisha.