Rajasthan looks to adopt Gujarat power reforms

Rate increase, remodelled business, debt recast being considered

The proposed changes in the Electricity Act, 2005, are yet to be placed in Parliament, but Rajasthan will initiate draft rules even before they are finalised by the Centre.

State government officials said Rajasthan would adopt the Gujarat model of electricity reforms to bring down transmission losses and mounting debt. Gujarat de-merged its power entities and redesigned them financially with regular rate revisions and technical reforms.

"We are separating the agricultural feeder. We also plan to reduce transmission losses from 30 per cent to 15 per cent in the next few years," Rajasthan chief secretary C S Rajan told the Business Standard.

REWIRING

• State government officials said Rajasthan would adopt the Gujarat model of electricity reforms to bring down transmission losses and mounting debt
   
• Rajasthan's three power distribution companies have Rs 80,000 crore debt

Rajasthan's three power distribution companies have Rs 80,000-crore debt. "Around Rs 52,000 crore was accumulated between 2008 and 2013. The losses are because of excessive borrowings, but the state government has never faulted on loan and interest repayments," said Rajan.

"We are in talks with banks to reduce the interest rate, which on average is 12.5 per cent. There is a certain amount the state government has borrowed at 13 to 15 per cent interest rate," he added.

The three distribution companies have applied to the electricity regulator for raising power rates by 10 to 12 per cent. The government is also planning to take over at least 50 per cent of these companies' losses in the next three years.

"The Union power ministry has asked the state government to take over the losses in one year. The state government, however, feels this will have a severe impact on its financial health," said an official.

With the setting up of a separate company for procuring power, Rajasthan is also separating the content and carriage businesses in power supply. Rajasthan Energy Development Corporation Limited is being set up for purchase and sale of power. The government is inviting bids for the distribution franchise.

"The new company will make sale and purchase of power more efficient. Rajasthan is power surplus at night and Delhi is deficient during summer nights. Rajasthan can sell its surplus to Delhi. The government and private experts will be roped in for better functioning of the company," Rajan said.

Rajasthan has 17,228-megawatt (Mw) capacity, 10,225 Mw is thermal power, and 4,710 Mw is from renewable sources. The state's peak monthly demand is close to 8,000 Mw.

Officials said to ensure proper billing, the state had set up nine police stations exclusively for the purpose of preventing power theft.