'Mahadiscom suffers revenue loss of Rs 1,860 cr in FY2014'

State-owned power distribution firm Mahadiscom suffered losses to the tune of Rs 1,860 crore in FY 2014 as some of its high-end industrial consumers opted for open access to buy power at cheaper rates.
"We have suffered huge loss in revenues as many of our high-end consumers have opted for buying cheaper power through open access. These consumers are the largest contributers to our revenues," Mahadiscom Managing Director O P Gupta, told reporters here today.
At present, Mahadiscom has 2.5 crore consumers on its network, of which nearly 1.6 crore are residential and low-end consumers. Nearly 40 lakh are farmers, 12-13 lakh commercial consumers and 12,000 high-tension or large industrial customers.

These 12,000 consumers use almost 36 per cent of the electricity and contribute 54 per cent to the total revenues of the company.
"So far, 328 consumers have shifted from our network and opted for open access. This resulted in a loss of nearly Rs 1,860 crore revenue in FY2014," he said.
In FY2013, the company had suffered a loss of Rs 1,723 crore due to the open access.

He further said that some solution has to be worked out or else the burden of shortfall in revenues will have to be passed on to the existing consumers.
"The Amendment in Electricity Act 2003 proposes that a power generator can sell the surplus power generated within a state to entities outside it under the open access mechanism to encourage competition.

We have signed long-term power purchase agreements at pre-determined rates, which may be higher compared to those who would provide cheaper power through open access. In such a situation, the governments will have to come up with a solution to ensure the discoms do not suffer revenue loss," he said.
Meanwhile, the state utility has also proposed to partner with Maharashtra Industrial Development Corporation (MIDC) to assist it in planning industrial parks on the latter's land.
"The state government has appointed MIDC as a nodal agency to develop industrial parks on its land. We have proposed to partner them in planning the area for developing distribution network," Gupta added.