Thursday, June 29, 2006

B`lore grappling with power cuts

B`lore grappling with power cuts
Power situation worsens as distribution companies default
Business Standard

Though reservoirs in Karnataka are nearly full owing to copious rains, the entire state, including Bangalore, is grappling with unscheduled power cuts everyday.

The reason: Karnataka Power Transmission Corporation Limited (KPTCL) and five electricity supply companies (Escoms), which purchase power from the Karnataka Power Corporation Ltd (KPCL), have not paid their dues. Besides, transmission and distribution losses are mounting by the day.

The KPCL supplies nearly 60 per cent of the power consumed (4,989 Mw) in the state while the central allocation is 1,070 Mw.

However, for the last two months, KPCL has been forced to make intermittent cuts in power supply to the KPTCL and the five Escoms – Bangalore Escom, Mangalore Escom, Gulbarga Escom, Hubli-Dharwad Escom and Chamundeshwari Escom (for Mysore region) – due to the non-payment of dues.

The non-payment of dues have hit power generation at KPCL's coal-based units. The worst affected is the Raichur Thermal Power Station (RTPS) since cash shortage from the non-payment of dues is affecting coal purchase.

“We supply power to KPTCL and the Escoms at the rate of Rs 1.40 per unit. But they are clearing the dues in installments. If the government does not direct KPTCL and Escoms to clear the dues at the earliest, the situation will only get worse,” a top KPCL official told Business Standard.

KPCL earns an annual revenue of Rs 1,600 crore per year, but its dues from KPTCL and the Escoms have reached Rs 2,800 crore. Besides, the dues are increasing every year by Rs 500 crore-Rs 600 crore as the Escoms are able to pay only about 75 per cent of the billed amount.

The dues, which were around Rs 1,555 crore in 2004, grew to Rs 2,102 crore in 2005. Now, it has reached Rs 2,800 crore.

"Till now, we managed our operations by raising loans at low interest rates. But financial institutions have warned us about the increasing dues, which have surpassed the revenue. It might not be possible for us to raise fresh loans. We may have to cut power generation, which will eventually hit the consumers," he pointed out.

Another worrying factor is the increasing transmission and distribution losses. Though the Karnataka government maintains that transmission and distribution losses have been reduced to 27 per cent, in reality, they are much higher.

A recent joint study by Crisil and ICRA revealed that the transmission and distribution losses in Karnataka was between 30 per cent and 40 per cent.

“It is much less in Bangalore as the cables have been laid underground. Power reforms are yet to be implemented in rest of the state,” the official pointed out.


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