Govt Plan To Rationalise Farm Power Tariffs

According to agenda notes for the conference, agriculture accounts for about 30 per cent of the total load in the system and it is estimated that the total loss of supply to agriculture was worth Rs 10,000 crore as on March 31, 1994.

We need to develop urgently a national consensus on revision and rationalisation of power tariff for agriculture so that there is a demonstration effect all over the country and no state can blame the other that it has not revised its agricultural tariff upwards, the agenda says.

It says that tariffs should be progressively adjusted and rationalised and if subsidy is to be extended it should be directly provided by the state government by making suitable provision in the budget. The efforts by state governments in general so far have been inadequate.

 

The agenda stresses that state electricity boards (SEBs) need to become commercially viable if they have to meet power needs efficiently.

The first step in this direction would be for them to have sufficient autonomy and ability to take decisions on commercial considerations so that they can meet all financial obligations to suppliers of inputs and power generators, meet debt servicing and debt redemption obligations and the ability to raise finance for expansion of their operations.

It says that restructuring of SEBs should get the highest priority in the national agenda. The government has suggested five different models for SEB restructuring with two common features setting up of independent regulatory bodies and privatisation of distribution.

The agenda calls for vigorous efforts to improve the plant load factor (PLF) of thermal power plants by ensuring better preventive maintenance and proper fuel supply linkages. The annual targets for improvements in PLF and reduction in auxiliary consumption and specific oil consumption need to be set up and then to be pursued vigorously.

It also lays stress on renovation and modernisation of old thermal stations. In certain old stations much investment would need to be made which may not be possible for SEBs to mobilise. Renovation and modernisation of such old thermal power stations can be taken up by seeking funding from the Power Finance Corp. We also have the options of involving the private sector.

Lamenting the lack of efforts to reduce transmission and distribution losses, the agenda says there is an urgent need to take up suitable measures in this area. It says a significant component of losses can be reduce with the minimum of investments.

The reduction in T&D losses by 1 per cent would result in saving a capacity of about 800 mw at present day consumption.

Calling for close monitoring of project implementation in the power sector, the agenda says time overruns add to the additional cost of the projects and may even jeopardise its economic viability. On the other hand, the benefits to the economy get delayed because of the time overruns.

Thus project implementation needs to be closely monitored at the highest level by state governments.