Power tariff problem can result in fiscal issue: KERC chairman

11:42 AM, Saturday, February 8th, 2014

KERC-chairmanBangalore: The failure to evolve a “viable solution” to the power tariff problem has the potential to become a major “fiscal issue” for the State government, warned the Chairman of the Karnataka Electricity Regulatory Commission M.R. Sreenivasa Murthy on Friday. Speaking at a seminar on ‘Karnataka Power Sector: roadmap for 2012-22’, organised by the Bangalore Chamber of Industry and Commerce, Mr. Murthy cautioned against imagining that the State could become power surplus in the near future.

Observing that the per capita consumption of electricity in Karnataka was just about 900 kilowatt hours (kWh), he said this was just about 100 kWh above the national average per capita consumption in India. “The consumption in the State compares poorly with the global average of 2,500 kWh,” he said. “It would be a joke to claim that the State will be power surplus any time soon, especially because we are at a very low level of consumption,” he remarked.

Mr. Murthy pointed out that the State is likely to witness a power shortfall of 8 per cent during the current year. However, he pointed out that even this shortfall is based on the “restricted supply” of power to many parts of the State, especially in rural areas. Although the thermal generation capacity had doubled in the last few years, mainly because of the new units operational in Raichur and Bellary, the low Plant Load Factor (PLF), which is a measure of the operational capacity of a power plant, has been declining steadily in the last few years.

“The low PLF is a key issue because it has declined from 89 per cent in 2007-08 to just about 60 per cent at these two plants,” Mr. Murthy said. Mr. Murthy said the State has tended on power purchases to tide over the shortfall in recent years. Although the average cost per unit of power has declined from Rs. 6.93 in 2009-10 to Rs. 4.38 in 2012-13, the total bill for power purchased by the State has increased sharply because of the much bigger volumes of purchases.

He urged the State government to ensure that investors who have been allotted wind power projects must be made to ensure that they become operational.

Meera Sudhakar from the Centre for Study of Science, Technology and Policy, which had been entrusted to prepare a status report on the State’s power situation, said short-term power purchases, which are usually about 40 to 50 per cent costlier than power sourced through long-term contracts, now account for about one-fifth of the available power in the State.

BCIC President H.V. Harish said energy consumption is peculiar in that additional supply “can create its own demand”.

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