This can be done if utilities tackle the issue of RLNG correctly even at this stage, say experts

Is there scope for the Andhra Pradesh State Electricity Regulatory Commission (APERC) to offer relief to power consumers from the tariff hike proposed by AP Transco/Discoms to garner an additional Rs 12,723 crore for 2013-14?

There appears to be an ample opportunity for this if the government and the utilities tackle the issue of RLNG (re-gasified liquefied natural gas) correctly even at this stage, several experts feel. The Discoms proposed an expenditure of Rs 6,000 crore, nearly half the sum sought to be raised through tariff hike (Rs 12,723 crore) to purchase power from RLNG-based power stations at a heavy price of Rs 10-12 per unit.

‘Defective policies’

Experts, who regularly highlight the consumers’ woes at APERC hearings, hold the “defective” Central/State gas and coal policies directly responsible for the current heavy reliance on RLNG, a costly fuel. Seeking anonymity, one of them said the policies are such that an artificial gas scarcity has been created to deny honouring of even “firm allocations” made for the existing gas-based stations, resulting in idling of 2,000 MW out of 2,770 MW capacity under these plants.

He alleged that Reliance Industries Limited (RIL), which said in 2009 that it would supply 80 MMSCMD of gas daily, hardly displayed its production details in public domain later and instead projected a shortage to ensure the enhancement of the price in 2014 when its present understanding with the government lapses.

Intriguing silence

The Empowered Committee of Ministers remained questionably silent over many queries raised in several quarters over this, another expert said. He also blamed the State’s failure to derive some advantage from RIL despite the KG Basin and its pipelines taking the gas from AP to other States. Experts suggest that the APERC must issue a directive to make things easy on this front. Any proper gas supply will ensure operation of 4,500 MW capacity of which 2,400 MW is from new projects.

The coal policy, under which supply to thermal stations through imports involving a huge budget is encouraged by the government rather than streamlining the indigenous production and allotment of new coal blocks to private parties, denying the same to PSUs such as Singareni has also been criticised.

High transmission costs

Utilities speak regularly about the awards they get for achievements in PLF, transmission and distribution but this high efficiency is not reflected in the 2013-14 proposals. The transmission/distribution costs for 2013-14 have been put at a whopping Rs 6,142 crore. This figure must be reduced offering relief to consumers, says a third expert. Further relief can be ensured by implementing DSM (demand-side management) measures for agriculture pumpsets (30 lakh), as mandated long ago for farmers enjoying free power, to save enormous amount of energy.


It’s just a proposal: Chief MinisterJanuary 13, 2013