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VOICE OF ELECTRICITY WORKERS
Power
Reforms in Delhi, Presentation by, CHETNA on
28th January
2006 in
Center for Media Studies, Saket, New Delhi
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Genesis of Reforms
§
International Scenario:
§
1978-
Public Utilities and Regulatory Policies Act (PURPA) passed by US Government
necessitating purchase of power by utilities from non utility generators at
avoided cost- independent power producers- in India Co-Generators
Genesis of Reforms
§
Three
categories:-
§
First
early movers- Mostly from Industrialized world UK, Norway, Chile, Argentina;
§
Second-
Industrialized countries- US –Federal structure - experience-multiple and
varying state level experiments-
§
Third-
Developing countries impressed by theoretical model and British results; Latin
America,
Genesis of Reforms
§
Sub
Saharan Africa – Extreme case of Electricity reforms – highly problematic
conditions;
§
South
Africa- in many ways somewhat identical to Indian situation
Genesis of Reforms
§
Reforms-
Restructuring- meaning thereby:-
Ø
corporatisation, privatisation, unbundling- essential parts of the package
Ø
Sharp
contrast to earlier organizational set up;
Ø
Public
ownership necessary;
Genesis of Reforms
§
Bigger
generating plants are cheaper;
§
Need for
co-coordinated operation to ensure reliability, efficient plant operation;
§
Dispatch;
§
Coordination of generation and transmission.
Genesis of Reforms
§
The
restructuring allows multiple electricity generators to sell electricity to
multiple buyers either final consumers or distributing companies through open
but regulated access to transmission and distribution wires
Genesis of Reforms
§
1980-
Chile created first wholesale power market- to fix its run –down power sector;
§
1990- UK
established power pool- the real bench mark for electricity market;
Genesis of Reforms
§
1993-
World Bank Policy requirement- condition for continued funding- Private
investment, corporatise state agencies and establish independent regulator;
§
Benefited
- AES and Enron faced flat demand at home hence sought new opportunities
overseas
Genesis of Reforms
§
1998-
World Bank Survey of 115 developing Countries:-
v44%
corporatise
v33%
passed new electricity law;
v29%
established a regulator;
v 40% had allowed
entry of IPP’S;
v18%
had allowed private distribution.
§
2004-
World Bank Survey of 138 developing countries
v
51% had corporatised;
v
47% allowed private participation in generation;
v
36% allowed private participation in generation
Power Privatisation
§
Report of
Steering Committee on Energy Sector for the Tenth Five Year Plan 2002-07:-
ØTo
ensure that State Governments commit themselves to a time bound plan for power
reforms (specially to reduce transmission and distribution losses to 15-20% in
the next 3-5 years and reduction in cash losses by one third year over 2000-01.
§Reforms
In India
Power Privatisation-
Reasons (Source-Concept paper on tariff-DERC-2000)
vUnmanageable
power crisis
v
Power cuts;
vAbnormally
High Power theft and pilferage;
v Inefficient
work culture.
vPrecarious
financial position of DVB- Low collections- No funds for improvement of
distribution system;
Power Privatisation-
Objectives (Source-Concept paper on tariff-DERC-2000)
§
Ensure
availability of Electricity to consumers at reasonable and competitive rates;
§
Ensure
financial viability of the Sector and attract investment;
§
Promote
transparency, consistency and predictability in regulatory approaches across
jurisdictions and minimise perceptions of regulatory risks;
§
Promote
competition, efficiency in operations and improvement in quality of supply
Power Privatisation-
Relevant Dates
ØDecember
1999- Delhi Electricity Regulatory Commission established in Delhi with
following objectives:
•Transparency
and Public Participation in tariff setting
•To
make objective view based on “Strategy paper on Power Sector Reforms” by GNCT
of Delhi with reference to “Inception Report on Restructuring of DVB by SBI
Capital Markets Ltd.
•To
perform a balancing role and make a view after making objective assessment
nSeptember
2000- Concept Paper on Tariff issued by DERC;
§16th
January 2001- Issued order no. 2/2001 titled as Rationalization of Tariff
(2000-01) for DVB without revising tariff but settling various contentious
issues;
§23rd
May 2001-ARR for 2001-02 and tariff determination principles laid down by DERC
for the years 2002- 03 to 2005-06 increasing tariff by 23%
§22nd
February 2002- Determination of Bulk Supply Tariff and Determination of opening
level Aggregate of Technical & Commercial losses;
§26th
September 2002 –WP No. 3654/01 filed by CHETNA dismissed by the High Court of
Delhi
§26th
June 2003: Tariff setting for 7/02 to 3/03 (9 months) and 03-04 by increasing
power tariff for domestic consumers by 5.6%
§9th
June 2004; Tariff setting for the year 2004-05increasing power tariff for
domestic consumers by 10%
§7th
July 2005: Tariff setting for the year 2005-06 increasing power tariff for
domestic consumers by 10%
Power Privatisation - Do
you know?( Source- DTL Order by DERC 05-06)
§
The
billing impact Tariff Hike on consumers is double of the basic tariff hike.
§
Till date
the basic tariff hike is 23% + 5.6% + 10% + 10%= 48.6%
§
Billing
Impact would be 97.2% (Compare your present bill with the bill for 2000-01).
§
Why
Government does not speak about 23% increase in 2001-02?
§
The DVB
did not have asset register since 1992-93 onwards;
§
The
audited accounts were not available from 1992-93 onwards;
§
The
DISCOMS so far have not complied with the directive of submission of up to date
asset register;
§
In absence
of Audited accounts the assets of DVB as per statement of account worth Rs.
5,659 Crores have been transferred to successor companies for Rs.4,263 Crores
which after depreciation of Rs. 1,103 Crores stand valued at Rs. 3,160 Crores
§
Where Rs.
1,396 crores have gone?
§
How the
depreciation of Rs. 1,103 Crores has been worked out ?
§
The DERC
does not know the basis of calculation of Subsidy of Rs. 2,600 Crores to the
DICOMS enhanced to Rs. 3,450 Crores.
§
Whose
money is this? Your and mine.
§
There is
no scientific formula for setting tariff.
§
Source
DERC order for 04-05
§
The DERC
works back the Bulk Supply tariff after deciding the paying capacity of the
DISCOMS adding 16% assured return.
§
In which
bulk sales business assured return is more than 2-3%?
§
DISCOMS
retain 20% of the old arrears recovered and 80% goes back to the Government.
§
The
DISCOMS write off the capital expenditure on infrastructure every year instead
of amortizing.
§
DERC
suggested to re-determine this issue so that 80% is reinvested in the DISCOMS so
as to reduce the burden on Consumers.
§
The Govt.
of NCT of Delhi did not agree.
§
The
TRANSCO shall sell power to the DISCOMS during the year 05-06 as under:
§
NDPL: Rs.
2.11 per unit
§
BRPL: Rs.
2.21 per unit
§
BYPL: Rs.
1.77 per unit
§
NDMC: Rs.
2.57 per kVAh
§
MES :
Rs. 2.57 per kVAh
Power Privatisation -
Do you know?
§
You and me
shall pay :
§
BRPL/BYPL/NDPL
: Rs 4.60 per unit;
§
BRPL/BYPL/NDPL:-
§
NDLT up to
10 Kw : Rs. 5.35 per unit;
§
From 10 Kw
up to 100 Kw: Rs. 4.87 p.u
§
Street
Lighting/ Traffic Signals: Rs. 4.60 p.u
§
Much
higher rate for purchase of power for DJB and other such utilities.
Power Privatisation -
Do you know?
§
Potential
to reduce losses in initial years is very high. The DISCOMS have been asked to
reduce on 17% app. Losses in first five years . Why?
§
What
prevented the DISOMS to reduce more losses than minimum commitment?
§
Why the
BSES at the time of filling Annual Revenue Requirement for the year 05-06 did
not mention about achievement of T & D losses?
§How
all of a sudden there was an insignificant overachievement?
§METERS:
§There
is no directive till date from DERC to replace the domestic meters up to 10 Kw
with electronic meters except for defective/burnt out meters.
§How
& why the meters are being replaced?
§Under
whose instructions? And
§Why
the Government and DERC are silent on this issue?
Power Privatisation-T &
D Losses
SBI Cap Report for 97-98 & 98-99
Power Privatisation -
T & D Losses
§
Despite of
1% reduction of T & D losses in 98-99 the loss went up by Rs.375 Crores;
§
Six
bidders qualified but only two bidders quoted;
§
Loss
reduction quoted less than the norms prescribed by the govt.
§
If the T &
D Losses are pegged at 20% the DISCOMS earn Rs. 1200 Crores profit at rates
prevalent in 2000-01;
§
The T & D
Losses (Transmission and Distribution Losses) continue to be very high as of
now.
ØRTI
- Energy audit report of DISCOMS from DERC vide letter No. F.9(9)/DERC/2002-03/2410
dated 13-10-2005
§
Comparison
of A T & C Losses NDPL& BSES,04-05 & 05-06;
NDPL:
Consolidated Report of Energy Audit for the year 2004-05 and 05-06 (April to
July)
|
Area |
% A T & C Losses 04-05 |
% 05-06 (April to July) |
|
Keshavpuram |
27.27 |
28.06 |
|
Civil Lines |
34.7 |
26.93 |
|
Model Town |
31.6 |
37.07 |
|
Shalimar Bagh |
40.52 |
37.80 |
|
Badli |
30.68 |
26.51 |
|
Rohini |
27.40 |
23.45 |
|
Bawana |
55.64 |
52.09 |
The
above table clearly indicates that though there is reduction in T & D Losses and
A T & C Losses but still the losses in Bawana Area are very high and there is
need for further reduction.
BSES:-
BRPL
Rolling A T & C Losses for the period April 04 to March 05, Oct 04 to Sept 05
and April 05 to Sept 05
|
Period |
% of A T & C Losses |
% of T & D Losses |
|
April 04 to March 05 |
40.6 |
35.53 |
BYPL
|
Period |
% of A T & C Losses |
% of T & D Losses |
|
October 04 to Sept 05 |
50.4 |
49.3 |
|
April 05 to Sept 05 |
55.0 |
54.0 |
The
above table clearly indicates that the T & D Losses continue to be major chunk
of A T & C Losses.
Government Role
§
Electricity
Act 2003 passed to replace Electricity Act 1910 and 1948 on 10th June
2003;
§
Stringent
punishment for power theft cases;
§
More powers
to DISCOMS and Government to crack down;
§
Claimed to be
more effective.
Suggestions
§
To obtain
copy of the agreement and ascertain the correctness of clause by exercising
Right to Information;
§
To seek
details with respect to the clauses under cloud under Right to Information;
To seek the District
Wise T & D Losses from DERC and make it public.
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