Power department must become self-dependent and cost-efficient
The electricity department has not been increasing power tariff for populist reasons. The Joint Electricity Regulatory Commission (JERC) has warned that it could be counterproductive and harmful to the electricity department in the long run. The state has not raised power tariff for last several years and the practice is going to continue in the current financial year. In its latest report the JERC has noted that the gap between revenue and expenditure of the electricity department was widening. The fall in revenue owing to the decision not to raise power tariff was being bridged by budgetary support from the government. Its budgetary support to the department is Rs 329 crore for the current fiscal. How long can the government support the department? The department would be in deep financial trouble in case the government withdraws budgetary support. Of course, the JERC, despite its reservations, has approved the electricity department’s decision not to raise power tariff this year. Let us hope that with the Lok Sabha elections and Assembly by-elections over, the electricity department would revise its power tariff to raise its revenue.
Every time a proposal for raising power tariff has been made by the JERC the electricity department has rejected it for keeping the consumers happy. Power tariffs in Goa are among the cheapest among states of the country and would continue to be so till at least the next financial year. The department has to make a realistic assessment and raise revenue to partially support development of power infrastructure. The JERC has said that if the revenue-expenditure deficit of the electricity department has to be entirely filled, power rates have to be raised by 17.5 per cent. It would be unadvisable for the department to make one-time increase of such a high quantum. However, as the department needs money to improve supply, transmission and distribution to provide power 24×7, they have to make gradual increases in power rates.
While revenue deficit is a problem staring in the department’s face, the JERC has found other serious faults in the functioning of the electricity department and has sought an action plan to address them. Significant among the shortcomings are the department’s failure to undertake audit of capital expenditure, conduct energy audits, check manpower costs and implement a proper billing system. The JERC has also found that the intra-state transmission and distribution losses calculated by the department are misleading due to unreliable and distorted data. The JERC has also raised concerns over the employee cost of the department, which has increased to Rs 205 crore as against the previously estimated Rs 152 crore. The JERC has directed the department to start collecting category-wise data on losses, connected load and asset allocation for determining the cost of power supply. The ageing power infrastructure in the state has been collapsing and situation is going from bad to worse. There is need to upgrade it to be in sync with the requirements.
It is clear that the electricity department is in a horrid shape because it does not manage its operations and revenues in a professional and efficient manner. No wonder, it cannot reduce power losses and it cannot maintain accurate data on losses. The state government must drastically curtail its budgetary support to the electricity department the next year and ask them to raise their tariff and revenue in order to make the department self-dependent. The government must ask the power minister and top officers of the department to cut down on staff costs and not make recruitments and add to the costs. The JERC has noted the department’s high staff cost. The government must prevent politicians from nursing their constituency by getting their voters recruited to the department. The staff cost has risen by 35% in one year. It is not just staff cost, many of them are a burden as they lack merit, whether it is technical job or non-technical. The electricity department cannot compromise on its responsibility to supply uninterrupted power to commercial and domestic consumers. If quality power is provided 24×7, consumers would not mind paying more for it.