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Power: southern States perform well

T. Ramakrishnan

But lag behind western region in narrowing down revenue gap, says study

CHENNAI: Southern States, which have performed better than many others in several components of the power sector, are still lagging behind the western region in some other features such as narrowing down the revenue gap and achieving higher levels of cost recovery from the farm sector.

This is an important message of the Power Finance Corporation’s study of State power utilities during the period 2003-06. Published in May, the PFC’s report analyses the working of the utilities on the basis of financial and physical parameters. Though it covered around 70 utilities in the first two years of the period (2003-04 and 2004-05), the number of utilities covered went up to 90 for the year 2005-06 in view of the unbundling of the State Electricity Boards of Assam, Gujarat, Maharashtra and Madhya Pradesh.

The significance of the southern region has to be seen in the context that two States — Karnataka and Andhra Pradesh — have made several forward movements in the power sector reforms whereas the Tamil Nadu and Kerala State Electricity Boards remain vertically integrated.

In terms of energy sold (expressed in million kilowatt hours), sale of power (in crores of rupees) and aggregate turnover (revenue from sale of power and other income but excluding subsidy booked), the nation had recorded rising growth rates. (In these three parameters, only the utilities selling power directly to end-consumers were considered for the purpose of the study).

Expectedly, the growth rates of the southern region, including the Union Territory of Puducherry too, were generally higher than the national average or that of the western region (which covers Maharashtra, Gujarat, Goa, Madhya Pradesh and Chhattisgarh). For example, in the case of energy sold, the figures of growth rate registered by the southern region were 8.4 per cent and 6.5 per cent for 2004-05 and 2005-06 respectively against the national average of 7.6 per cent and 5.3 per cent and the western region’s 6 per cent and 1.7 per cent.

The south’s performance was equally good in the areas of plant load factor (PLF), determined for coal-fired thermal power stations, and average aggregate technical and commercial (AT&C) losses.

For 2003-04 and 2004-05, the average PLF of the utilities in the region was above 80 per cent. (For this purpose, only the utilities in Tamil Nadu, Karnataka and Andhra Pradesh were taken into account).

Even in 2005-06 when the region’s performance went down, the PLF of the stations in Andhra Pradesh was a little short of 80 per cent whereas it was around 70 per cent in Karnataka and Tamil Nadu.

However, the region needs to pay more attention in bringing down the gap between the average cost of supply (ACS) and the average revenue realisation (ARR) and in achieving better cost recovery from the farm sector. [ARR represents the revenue without considering subsidy booked] In the three years, the western region’s performance in bridging the gap between ACS and ARR was much ahead of the nation’s performance.

For instance, in 2005-06, the national average was 36 paise per kilowatt hour whereas the western region recorded 13 paise/kwh. But, the south’s figure was 33 paise/kwh.

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