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Home News Power Sector News Review of A Decades’ Expererience and an Agenda for Power Development in Kerala Up To 2012

Review of A Decades’ Expererience and an Agenda for Power Development in Kerala Up To 2012

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Electricity is considered as one of the basic infrastructure facilities and a basic need of modern human society. State Electricity Board was the statutory institution to provide electricity to the needs of the state. Ten years ago, the conditions prevailing in this sector was not encouraging. There was 100% power cut and load shedding prolonging up to 3.5 hours in the night/ day.T&D loss was in the range of 20%-21% Financial health of the SEB was deteriorating. Over all service provided to the consumers were not satisfactory.

LDF government which came to power in the state during 1996 declared the following aims to increase the availability, accessibility, reliability and affordability of power in pace with the needs of the state:

· Convert the State of Kerala as a Power surplus state by 2000 by completing the ongoing projects expeditiously, taking up new projects which are in the pipeline and completing it without cost over run and time over run, renovating and modernizing the old generating stations, rejuvenating the activities in investigation and preparation of new project reports, promoting the development of non-conventional energy, encouraging energy conservation programmes, etc.

· Strengthen the Transmission and distribution system to reduce the T&D loss to the maximum extend possible with in the time frame and to increase the quality of power supplied ,by expediting the construction of transmission and distribution projects, taking up new projects to achieve the declared goal including signing up BPTAs with Power grid corporation, etc

· Improve the quality of service provided by KSEB by making the organization consumer friendly including it’s administration, procedures, interface with public etc
· Change KSEB as a financially healthy organization so that it can take up the future challenges.

It can be well derived from this table that there was tremendous progress in carrying out the works to achieve the above goals from 1997 to 2001.Then retardation is visible in all the phases of activities. This was consequent to the deleterious policy change to denigrate public sector in tune with the neo-liberal policies of GOI. A well-planned hue and cry was raised by the government on the accumulated losses of KSEB thro’ the white paper published during July 2001.A reduction in the base capital investment also can be observed during this period.
As aimed at, the state was converted to a power surplus state by adding 1036.68 MW of capacity with the Kerala grid by 2000.Power cut and load

shedding was lifted and the state became one of the few states in India with out power cuts and load shedding. Even though load shedding was re-introduced by the UDF ministry it was not a technical decision based on the inadequacy of peaking capacity, but one based on financial aspect. During the same period Kerala sold power to Tamilnadu from it’s naphtha based power stations. Purchase form the central generating stations out side Kerala also increased considerably during the last 10 years based on the earlier central allocation as per Gadgil formula and the subsequent BPSAs signed during 2000-01.Using the leverage in operational flexibility due to the higher percentage of hydro-projects, Kerala could make use of the ABT regime and make money by selling power at low frequencies and purchasing power at high frequencies. At present Kerala is selling 500 MW to the northern region during off peak hours and 100 MW during peak hours in addition to the sharing of the capacity of NTPC station at Kayamkulam in 1:1 ratio. Due to the escalation of the price of Naphtha from Rs. 6000/MT to Rs.33500/MT with in a period of 10 years, the variable cost of the naphtha based stations has become unaffordable. Three stations having a capacity of 350+157+21 MW is idling consequent to the steep hike in petroleum based fuel cost.

T&D losses were brought down from20.04% to17.21% during 1996-2001.The UDF government changed the loss calculation system in pace with the reform parameters of GOI to suit privatization of the sector. Any how there is 5.73% reduction in Aggregate technical & commercial loss between 2001-02 and 2004-05 .During the first half of this decade in evaluation, supply interruptions were reducing and system voltage levels were improving to the statutory levels, even at the fag end of LT lines in the far north of Kerala. Service connections which require only weatherproof wire could be given with in 4-5 months from the date of application and others with in two years, with out the payment of any O.Y.E.C charges,ie. in normal priority which was a great relief to the common Keralite with out electricity. Industrial and agricultural applicants were connected up immediately. But this scenario has totally been changed and situation worsened in the second half concomitant with the implementation of neo-liberal policies.

A very similar pattern of progress is visible in making KSEB a consumer friendly organization. Earnest efforts were made to develop human resources thro’ training and re- training the existing employees, creating necessary offices including control rooms in district HQs, recruiting the required staff, conducting adalaths as a routine to redress the grievances of consumers and settle the dispute with the Board, simplifying the procedures, implementing spot billing and introducing computerization in preparation of bills and revenue collection, changing of faulty meters with electronic meters, introducing consumer cards etc.Many of the above except computerization and meter changing have not been continued in the second half. Meter changing and computerization could not reach the target as opposition came from the public when the poor quality of equipments and software very badly affected the service to the public.

Contrary to the situation prevailing in the progress of achieving the first three aims mentioned above, the financial health of the Board is improving in the second half. It is not a miracle, but only a yield of the investments and achievements during the first half which enabled the sale of power to other states. It is also a logical culmination of few administrative and technical steps taken as requested and pointed out by employees and officers organizations plus the fruits of some other factors. Swapping of loans with high interest rate, taking away the sales tax for naphtha for power generation, intensifying the anti-power theft activities and arrear collection, modifying tender formalities, implementing energy auditing and reduction of T&D loss, pressurizing the state government to clear the huge dues towards subsidy, selling the scrap valued to the tune of Rs. 150 cr.,changing of electro- magnetic energy meters with electronic meters, increasing the billing and cash collection efficiency by computerization, exploit the ABT regime by efficient merit order load dispatch, etc were the steps taken with the support of employees. But there was also drastic curtailment on staff strength and cost of human resources development, resorting to outsourcing leading to deterioration of the service provided to the consumers and other serious consequences connected with the safety, industrial relations , law of the land etc.The funds provided by GOI to a total of Rs1300 cr for APDRP scheme and RGGVY scheme appears as a relief to the Board in releasing from the clutches of loans with high interest rate , even though threads linking to the neo-liberal policies are tied with it .

One lacuna to be pointed out, especially from the experience, is in the case of exploiting the hydel resource. It is true that there was shining achievements during the first half of the decade under consideration in completing the hydel projects pending completion for more than 18 years like Kakkad.But no major storage project could be started during this period, even though there was emphatic endeavor to start the construction of Athirappally project which was blocked by a litigation of some vested interests. On the other hand petroleum based generation was started both in private and public sector, which shot up the generation cost. This was consequential to the paradigm shift in the fuel and investment policy of GOI. It is to be born in mind several times that the economy in production process is an integral part of engineering which is applicable in power production too. So for the production of electricity, the locally available cheap resources are to be utilized first. As far as Kerala is considered, the only energy resource available for commercial production of electrical energy is the hydel potential; to the tune of 4333 MW.Out of the above only 1864 MWs have been harnessed. At present the cost of average hydro- power production is only 03 paise/ unit and that of Kayamkulam power will be Rs.6.73/ unit at 80% PLF. Cost of power can be kept low only if percentage of hydel power is increased. For the flexibility of operation too, especially during peak time, hydro generating stations are highly advantages. Paying sufficient care to obviate environmental degradation and connected issues; Kerala has to make headway in harnessing the hydel potential further which can be planned as multipurpose as done earlier.

Another major development in the state power sector during this period is the enforcement of Electricity act 2003, the appointed date of which was 10th June 2003.This act is only a legal frame work of the neo- liberal policies in power sector. As per the act State Electricity Regulatory Commission (SERC) was constituted and functioning for the last two years. When the draft regulation recently published by MOP is implemented, Electrical Inspectorate will be scraped and Chief Electrical Inspector will work under SERC with the residual powers. As per the act, KSEB is the state transmission utility and a licensee and continue as per sn. 172 of the act. There is provision in the act to continue the Board as a single entity as a distribution licensee and state transmission utility which owns generation assets.

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