By Dr. Bhamy V. Shenoy
As far as one can remember, Karnataka has been facing power crisis for more than 25 years. Brown outs and black outs have become regular features of the energy scenario whether reservoirs are full or not. Power crisis has become a perennial phenomenon — a State which had power surplus one time has been a power deficit State since a long time. It is likely to remain so unless some basic but politically difficult reforms are implemented as described later, says Dr. Bhamy V. Shenoy, Convenor of Mysore Grahakara Parishat (MGP), in this article which will be published in two parts .—Ed.
Every new Energy Minister irrespective of party affiliation soon after assuming the portfolio makes tall promises to solve power crisis within a short time. As we know there has been no improvement in power scenario.
What is the current demand and supply of electricity in Karnataka?
On a realistic basis, no government agency [Ministry of Energy or Karnataka Energy Regulatory Agency, or power sector companies like KPTCL, KPCL, five Energy Supply Companies (ESCOMs), or NGOs] has any reliable statistics on the supply and demand for power in Karnataka based on any scientific studies. According to the Energy Minister, Karnataka’s electricity demand is supposed to be about 130 million units per day while generating capacity is about 110 million units. Of cou-rse this demand changes with the season and so also the supply. It can be safely assumed that on energy demand basis the deficit is at least 15% or more and based on peak demand deficit for power is more than 18%. In short, Karnataka is unable to generate power to meet either average or peak demand of State.
What is the effect of power crisis? Who are the losers and winners from the power crisis?
It is difficult to estimate with any degree of accuracy the loss to GNP as a result of the power crisis. Still it is a safe bet that actual GNP is at least 15% less than what it would have been if we had a better power situation. Every one including those who have inverters and private generator sets is a loser. Generator sets besides creating noise pollution are also a drain on the foreign exchange by adding to import of crude oil. Especially in this age of internet where one needs continuous supply of electricity for operating many appliances, loss of quality and reliable power will have great impact on productivity of every worker.
Still there are some few winners. Those who sell inverters and generators, oil traders selling diesel, petrol and kerosene to operate these generators are clear winners. Politicians are also winners in unintended ways. They can use their influence to give connection to favoured people even when they do not comply with all the regulations, force ESCOMS in giving unmetered connections, prevent ESCOM employees from disconnecting those who do not pay bills, etc.
Who is in charge of power sector in Karnataka today?
Actually no authority or company can be held accountable for meeting the power needs of Karnataka today. Earlier there was just one company, Karna-taka Electricity Board (KEB) which could have been held accountable for meeting the power needs of the State. On advise of the World Bank, KEB was unbundled into generation, transmission and distribution companies. On paper such an unbundling sounds nice. But in practice it has been a disaster so far with no one having the overall responsibility to plan for the future.
There are various independent power generating companies along with the government owned Karnataka Power Company Ltd (KPCL) and Visweswa-raya Vidyut Nigam Ltd (VVNL). For power transmission there is KPTCL and and for distribution and supply of power we have five energy supply companies — Bangalore ESCOM, Mangalore ESCOM, Chamundeswari ESCOM, Hubli ESCOM and Gulbarga ESCOM.
Essentially it is the State- owned companies which are responsible for power sector in Karnataka and independent power producers (IPPs) have a minor role. In addition since 1999, there is Karnataka Regulatory Energy Commission which is in charge of monitoring the operations of power sector companies and also approving any tariff changes. It has also the responsibility to ensure reliable supply of quality power by ensuring the profitable operations of ESCOMs. KERC was expec-ted to be a powerful body with high expectations. As explained later this has remained on paper.
What are the root causes for power crisis?
There are several reasons for the age old power crisis. The first and foremost is the competitive politics of supplying power below the cost of production to create vote banks. Every one knows that if a shop keeper continues to sell his products below the cost of goods, he would go out of business. This is a basic lesson in economics. But our political leaders who are short term oriented are naturally interested in maximizing their gains and not interested in the long term interests of the State.
The second reason is the political interference in the management of power sector companies.
The third reason is the inefficient operations of all the power sector companies. These are not operated along commercial lines. If they were private stockholder owned companies they would have been closed down a long time back. Their management is not held accountable for supplying quality and reliable power to the consumers.
Finally the apathy on the part of power sector consumers is also responsible for the current power crisis. In a functioning democracy, voters should hold the elected representatives responsible and vote them out.
Those consumers who are rich have already installed private generator sets and are not affected by the power crisis. Even most of the middle class have installed inverters. Thus the relatively well off section of the society has overcome the problem whereas the majority continue to suffer in silence. Earlier years there used to be some protest. Today even that little protest is absent and consumers have accepted the blackout and brownout as their fate. They do not realise that in the 21st century of “shining India” they should get 24 X 7 electricity supply.
KERC has failed miserably in its mandates and has become just another unproductive and inefficient government agency.
Why are transmission and distribution costs are so high?
Transmission costs allowed by KERC is about 4.00% while distribution cost varies between as low as 14% for MESCOM to as high as 26% for GESCOM with an average of 21.5%.
Actually the reason for such a high distribution losses are theft. Actually it could be even higher since consumption in agriculture is just an estimate. Many farmers either do not have meters or their meters are not working. Even after 10 years of the existence of KERC, they have not been able to force the ESCOMs to install meters at the premises of all consumers.
In addition there is also the problem of collecting billed amounts. While collection rates are high for BESCOM and MESCOM they are as low as 85% for some of the other ESCOMS showing how inefficient they are. By international standard T & D losses should be less than 10%. If ESCOMs are restructured to have competent managements, then it should be possible to reduce T & D losses to international standards.
[To be continued tomorrow]