BackMaharashtra moves on distribution losses
Govt outlines a scheme whereby engineering graduates and diploma holders in rural areas will be tasked with checking electricity distribution losses
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Mumbai: The Maharashtra government has outlined a scheme whereby engineering graduates and diploma holders in rural areas will be tasked with checking electricity distribution losses and recovering unpaid bills, in return for a fifth of the additional revenue they manage to generate.
The power from an electricity station is routed through so-called feeders to clusters of two or three villages. Selected candidates, called feeder managers, will be assigned a feeder each for their work.
Announcing the scheme, state energy minister Chandrashekhar Bawankule said, “Tariffs for industry in Maharashtra are one of the highest and if we have to bring down these tariffs, one way to go about it could be to reduce our distribution losses and improve bill recovery. And we plan to appoint local engineering graduates and diploma holders who will be assisted by teams of four to five Industrial Training Institute of India (ITI) trained technicians."
Even though overall transmission and distribution losses of state-owned power distribution utility Mahavitaran are 18%, below the national average of 24%, losses are more than 45% in 1,400 out of its 16,000 feeders, which also see bill collections of less than 50%.
Mahavitaran carries out electricity outages for six to eight hours in these areas a day to minimize its losses during the morning and evening peak hours.
A senior Mahavitaran official, who did not want to be named, said, “A 1% reduction in loss can bring additional revenue of ₹ 250 crore to the utility."
However, experts point to the pitfalls, saying the scheme may not work and instead lead to strong-arm tactics by feeder managers, similar to the experience with some bank loan recovery agents.
They also point to similar experiments in Odisha and Karnataka that did not give desired results.
Kameswara Rao, leader of mining, utility and energy practice at consulting firm PwC India, said “The collection-based franchisee models attempted earlier in rural areas of other states offered very marginal benefits, and did little to improve viability of distribution. In order to make any meaningful improvement in the viability of distribution, the franchisee must take ownership of power supply such as in an input-based franchisee. This is only possible with a corporate entity which can raise finance for working capital and stand guarantee to better service standards."
Ashok Pendse, designated consumer representative of the Maharashtra Electricity Regulatory Commission (MERC), said “First, Mahavitaran should identify the reasons behind such huge losses and their exact impact on these losses. Reasons for losses vary from area to area. In some areas, obsolete network can be contributing to losses; in other areas, Mahavitaran’s machinery may be simply not be able to reach and deliver and collect the bills; in some other areas, it may be pure theft. Unless you identify reasons and their impact on losses, just by appointing so called feeder managers, situation won’t improve."
There should also be clear criteria for selecting feeder managers; otherwise it would end up as a scheme designed to benefit workers of the ruling Bharatiya Janata Party (BJP) across the state, he warned.
“The appointment of these feeder managers will lead to the situation after banks and financial institutions started appointing so-called recovery agents, who may harass consumers. So, Mahavitaran must have a clear mechanism to address complaints of common consumers at the hands of these feeder managers", Pendse pointed out.
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