Teething problems in ensuring effective transition of assets and liabilities from united Andhra Pradesh to the successor States of Telangana and AP continue to haunt the power sector.

This was evident from the orders issued by the Andhra Pradesh Electricity Regulatory Commission in respect of levy of transmission and wheeling charges and annual fee and operating charges of the State load dispatch centre which are purely provisional in nature.

The regulator said the present determination of the tariffs has been made for the energy infrastructure environment of the undivided State of Andhra Pradesh.

The present charges might have to be reviewed by the regulatory commissions of the two States in the light of their respective energy infrastructure and environment. If the commission does not proceed to determine the tariffs for the third control period (2014-19), the power utilities will not have a legal basis for levying tariff. This would create a void affecting the economic viability of the utilities to recover charges for performing their essential functions to maintain the critical sector.

Moreover, the electricity regulatory laws in the State have not yet been amended to recognise the formation of the two States from the existing State. The APERC said in its order that it had carefully examined whether it could issue individual tariff orders for the two States with effect from June 2, the appointed day.

Though it was desirable and even necessary requirement, it was, at present, not feasible for implementation after factoring in few issues. Firstly, the allocation of ownership of the present electrical infrastructure framework has to be finalised for determination of cost of supply individually for the two states. This has not yet been done.

The second reason was the mandate outlined in the Reorganisation Act relating to determination of share of the two States in the power output of Central and State generation stations. Though it is critical for tariff determination, it has not yet been finalised.

Another relevant factor that hindered determination of individual tariff orders was the non-finalisation of the energy infrastructure details as well as information about the assets and liabilities (both recorded and contingent) in the districts of Anantapur and Kurnool that had been transferred from the Central Power Distribution Company to SPDCL, the orders said.


Power sharing may spark row May 13, 2014