Power thieves in rural India steal over 20% of electricity

Tracking rural usage is part of Prime Minister Narendra Modi’s vision of reforming the country’s power sector and lighting every home in the country by 2019


Photo: Bloomberg
Photo: Bloomberg

New Delhi: India is looking to its countryside to understand how more than 20% of power distributed by state retailers goes missing.

Rural Electrification Corp. plans to install equipment that will transmit usage data from metres at each of the country’s 100,000 rural feeder stations, one of the final electricity distribution points between power plants and customers, said Ritu Maheshwari, the federal company’s executive director. Data from the meters, which will be installed by state retail companies, will be streamed live to the public, Maheshwari said.

“Our aim is to make sure we know exactly how much electricity is flowing through the rural feeders,” Maheshwari said. “It helps spotting and solving problems faster. It also helps in understanding the trend in rural power consumption.”

Tracking rural usage is part of Prime Minister Narendra Modi’s vision of reforming the country’s power sector and lighting every home in the country by 2019. Regional distributors lose almost 23% of the electricity they buy through theft, unmetered usage and dissipation through old wires, hurting their finances and preventing them from repaying debt. A federal-government plan to make them profitable has set a target of bringing that down to 15% by 2019.

Phone apps

The data gathered from the feeders will be posted on a new smartphone application, Maheshwari said. Similar apps have been created by the central government to track electricity pricing, transmission projects and rural electrification.

Regional electricity distributors are reimbursed by state governments for selling power below cost. The retailers sought Rs.36,420 crore in subsidies during the year ended March 2014, according to a report by Power Finance Corp., a lender to power projects.

Distributors aren’t getting reimbursed adequately, making it difficult to repay loans amounting to nearly Rs.4.1 trillion and to purchase all of the electricity required by the populations they serve. That leaves the country’s power plants running below capacity, while one in five people go without electricity.

Last mile

India’s agricultural sector, the mainstay of the rural economy, accounted for 21.7% of electricity consumption in the year ended March 2014, while contributing just 8% to power retailers’ revenue, according to the latest data provided by Power Finance, which also studies the performance of state power retailers. Industrial users, who pay higher tariffs to partially subsidize agricultural customers, accounted for 29.2% of the consumption and 41% of revenues.

“Tracking last-mile electricity flow will help in proper energy accounting,” said Debasish Mishra, a partner with Deloitte Touche Tohmatsu Llp in Mumbai. “The initiative will also help the state governments streamline power subsidies, as they will have a better grip on agricultural consumption.” Bloomberg

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