State power sector losses pegged at Rs 4,520 cr
Manish Sirhindi
Tribune News Service

Panipat, December 25
The Shunglu Committee, which was set up in July, 2010, by the Planning Commission has submitted its report in which the Haryana power sector losses of five years have been pegged at Rs 4,520 crore.

The report stated that in case of Haryana, power purchased in five years was Rs 36,616 crore, which formed revenue expenditure of Rs 45,073 crore. The per unit power supply cost was Rs 4.79 per unit against realisation of Rs 4.31 per unit. While, the revenue receipts during this same period were of Rs 40,553 crore.

The committee, which had been constituted to recommend measure that could be initiated to improve the financial health of the power companies stated that power sector reforms in general and effectiveness of the state regulatory commissions in particular should be assigned priority. The high-level panel, which was headed by VK Shunglu claimed that the Electricity Act, 2003, envisaged the separation of generation, transmission and distribution for reforms in the power sector had succeeded in unbundling the power boards but the separation of boards into three utilities was not in substance.

The ownership, maintenance financial wellbeing was so interlinked that it could not be said separate in any real sense of word. The committee said the second set of reforms in form of open access in its broadest sense remained a dead letter. Moreover, emergence of the truly autonomous State Load Despatch Centres (SLDCs) was still in its infancy.

The report suggests that in case of all states, including Haryana, the power regulators should play a major role in the financial stability of restructured Discoms. Regulators must ensure that entire validated costs of distribution companies get recovered.

Regulators would allow distribution companies to pass on the entire burden to consumers to help them come out of annual losses. In yet another recommendation that vindicated the demand being put up by state power engineers, the committee said the chairman of Discoms should have tenure of 3 to 5 years and should come from a professional background or exclusive IAS. Besides, two non-executive independent directors from power sector should also be there on Discoms board, the report stated.

The report on financial heath of utilities states the total state government loans on utilities were Rs 24,079 crore and other loans were Rs 1,60,662 crore. The liabilities of utilities were Rs 1,53,356 crore.