Who is to blame: discoms or consumers?

Consumer behaviour, which apparently adds to avoidable load on the network, has come under criticism


Utilities say that power theft also impacts their financial and operational performance including outages, although it has been reported to be significantly lower from 2002 when the distribution business was privatized. Photo: Indranil Bhoumik/Mint
Utilities say that power theft also impacts their financial and operational performance including outages, although it has been reported to be significantly lower from 2002 when the distribution business was privatized. Photo: Indranil Bhoumik/Mint

New Delhi: Power outages in the capital city at the peak of summer have highlighted the cracks in the regulated electricity sector, but responses from the government and the utilities so far remains limited to accusations and explanations. Now, consumer behaviour, which apparently adds to avoidable load on the network, has come under criticism.

Delhi power minister Satyendra Jain had on 14 June threatened “strong action” against Reliance Infrastructure Ltd-owned private utilities for the “unprecedented power outages,” in a letter to Reliance Group chairman Anil Dhirubhai Ambani, blaming company managers and engineers for the power outages.

State-owned transmission company Delhi Transco Ltd (DTL), however, on Thursday blamed rising electricity consumption and lack of proper maintenance for the situation.

DTL stated that it was committed to providing uninterrupted power supply but “the ever increasing demand and limitation of resources can for sometimes affect the supply.” It said peak consumption had gone up to 6,260 megawatt (MW), from 5,846 MW a year ago. From 2008 levels, consumption has gone up by 55%. Mumbai’s power demand accounts for only 59% of Delhi’s demand.

DTL advised consumers to shift non-essential load to non-peak hours and to use energy-efficient appliances. The company also said its ability to expand network for future and to carry out day to day maintenance was affected because of Rs.2,000 crore of dues owed by private utilities BSES Yamuna Power Ltd and BSES Rajdhani Power Ltd.

Utilities including BSES and Tata Power Delhi Distribution Company on the other hand, are reeling under power supply costs that are not yet allowed to be passed on to consumers, called regulatory assets, running up to Rs.36,000 crore, impairing their ability to make fresh investments in infrastructure.

A spokesperson for BSES stated on Thursday the two BSES utilities were under huge financial stress due to non-liquidation of regulatory assets estimated to be over Rs.16,000 crore as of 31 March 2016 and that the distribution companies were making “concerted efforts to address the situation and clear pending dues in a just and equitable manner.”

“The electricity value chain is like a delicately balanced pack of cards. All stake holders have to be stable. The distribution sector has been in poor financial health for a long time because electricity demand has gone up whereas tariff has not gone up accordingly,” said Kalpana Jain, senior director, Deloitte in India.

Since there is a gap between the cost of power supply and the price realized from consumers, every extra unit of power supplied adds to the revenue loss of distribution companies.

Utilities say that power theft also impacts their financial and operational performance including outages, although it has been reported to be significantly lower from 2002 when the distribution business was privatized.

Praveer Sinha, chief executive officer (CEO) and managing director of Tata Power Delhi Distribution Ltd, said in May that his company had lowered its aggregate technical and commercial (AT&C) losses to less than 9% of the total units of electricity supplied from about 53% at the start of operations.

These represent energy losses from transmission of electricity as well as power theft. BSES distribution companies have lowered AT&C losses to around 15% now, according to a person privy to discussions between the utility and the Delhi government.

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