Power gains

The power situation in the State is brightening under the newly formed MSEB Holding Company and its three subsidiaries.

MAHARASHTRA may be passing through a huge power crisis at present but, if the first year report card of the newly formed MSEB Holding Company and its three subsidiaries is anything to go by, the power situation in the State may soon be better. Ever since the unbundling of the Maharashtra State Electricity Board in June 2005, the four separate entities that were created have put together several initiatives at the micro as well as macro level, which they say have begun to sort out the State's electricity problems.

While electricity board officials believe that the unbundling has definitely brought about better efficiency, observers say there are many issues to be resolved. There is a huge shortfall to be met. Transmission and distribution (T&D) losses remain high. Rural areas continue to face heavy load-shedding or have no electricity for much of the day. And the latest tariff structure is a highly controversial issue.

However, Chief Minister Vilasrao Deshmukh says his government is determined to resolve the State's power problems. "The State wants to regain its position as a power-surplus State," he told Frontline. "We will encourage group captive power generation and facilitate non-conventional energy initiatives."

Maharashtra faces a power shortfall of 3,500-4,000 megawatt (MW). The peak demand increased from 11,357 MW in 2002-03 to 12,749 MW in 2004, which is an alarming rise of nearly 12 per cent, says a report compiled by the Maharashtra State Electricity Distribution Corporation Limited (MSEDCL), one of the new subsidiaries. To meet the shortfall "Dabhol will supply 700 megawatt until March next year," the Chief Minister said. "After that we expect to get 1,200 megawatt from the plant."

As the State's generation capacity has stagnated at 9,300 MW, the deficit has to be met by buying additional power and commissioning new plants, said a spokesperson of Mahavitaran, the rechristened MSEDCL.

"We have a goal of surplus power by 2010-11. An action plan has been prepared for an additional 17,212 MW in the next five to seven years," Deshmukh told Frontline.

In order to increase power supply to 17,212 MW, the MSEDCL plans to obtain 750 MW of power from projects under construction, 2,872 MW from projects that have tied up with the National Thermal Power Corporation (NTPC) and inter-State projects, and 2,150 MW from the Dabhol project, now known as the Ratnagiri Gas and Power Private Limited.

The Maharashtra Generation Company, another subsidiary, will supply 7,540 MW through various projects planned, and 4,000 MW will be purchased through competitive tenders from independent power producers (IPPs). "We did not have the infrastructure to meet the demand and that is what we need to focus on now," the Chief Minister said.

A statement from Mahavitaran says that it has already put in place several schemes, and they have begun to show results. For instance, the Akshya Prakash Yojana is a scheme where a goathan (village) can avoid load-shedding in the evening by reducing the load voluntarily. Each person agrees to finish work that requires power within a particular time. In order to provide at least basic light, single-phase transformers have been fixed in 700 villages. To ensure that this works, separate feeders for villages are being set up.

Within small towns and some bigger cities, the power utility is carrying out an awareness campaign to reduce power consumption and thereby decrease load-shedding. Furthermore, a theft reduction drive has caught 15,000 cases of power thieving. A strict monitoring of meters should eventually help reduce losses. Additionally, the metering of distribution transformers will monitor energy transmitted. This will have to tally with customer usage and hopefully losses will reduce as a result, he says.

One of the immediate results of the unbundling has been better recoveries, says the Chairman of the MSEB Holding Company. The recoveries this year in June to October have been Rs.1,150 crores as against Rs.950 during the same period last year. He attributes this to an energised workforce. An increase in the salaries was overdue. Since the company was cash-strapped, it decided, with the unions' concurrence, to hike salaries but pay arrears on the basis of performance. The official said: "We said that if we could achieve our target of Rs. 1,050 crores, half of that would be used for the payment of arrears. The target was met. Today we have a motivated workforce and a rising recovery graph."

Bill payment kiosks, e-payment, spot billing, and the decision to disconnect customers with arrears will help make recoveries, he says. The reduction in T&D losses from 38 per cent to 35.2 per cent is significant but nowhere near what it should be. "We are targeting a reduction of 3 per cent upwards by next year," he said.

"Once Dabhol starts we will survive; it should start by mid-2007. We need that power desperately," says the Chairman. From the technical point of view the project is exceptionally sound. For instance, the Dabhol plant can exclusively use the 67.5 tmc of water released from the Koyna dam, which now just flows into the sea through Ratnagiri. The jetty is perfectly located for fuel transportation. Besides, this is the only big power project in western Maharashtra. Power is transmitted mainly from the east and this often causes instability in the grid, he says.

Ironically, it was the Dabhol Power Company that was singularly responsible for the MSEB's downfall. Hopefully that is now an old story, and the power utility is on its way to recovery.