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BESCOM’s revenue deficit increases five-fold

B. S. Satish Kumar

It is estimated to touch Rs. 1,548 crore this financial year


Revenue deficit stood at Rs. 302.68 crore last year
Main reason for high deficit is power procurement from IPPs

BANGALORE: Call it a coincidence or an irony of sorts. The revenue deficit of BESCOM has shot up five-fold at a time when this premier power supplying company of the State is celebrating the fifth anniversary of its formation. The revenue deficit, which stood at Rs. 302.68 crore last year, is estimated to touch Rs. 1,548 crore this financial year.

According to sources, it was the procurement of costly power from the independent power producers (IPPs) that played a major role in increasing the revenue deficit of BESCOM, which is supposed to be one of the well-managed Escoms in the country. According to a notification issued by the Government about 18 months ago, BESCOM is supposed to procure 81.57 per cent of the power produced by the IPPs which is costlier when compared with that of other power generation projects of the State Government. Similarly, BESCOM is supposed to buy all the costly wind energy while its share from the cheap hydel power has been reduced.

On its part, the Government has a point in allocating the costly power sources to BESCOM as this Escom has the highest number of industrial and HT consumers who pay high tariff. But the power consumption by BESCOM, especially in Bangalore, is growing at a rapid pace of over 20 per cent a year. This steep increase in power consumption played a role in increasing the revenue deficit.

According to BESCOM sources, its average power procurement cost is around Rs. 2.40. But the tariff of power procured from the IPPs varies from Rs. 5.34 to Rs. 7.25 per unit. Similarly, wind energy is around Rs. 3.40 per unit. According to statistics published by BESCOM, the more it sells, the more loss it will incur. This is because its average rate of realisation of revenue for supplying an unit of power is Rs. 3.66 as against the average cost of supply of Rs. 4.64. Hence, it will incur a loss of 98 paise for supplying each unit of power.

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