Good monsoon bad news for Power Dept
Rakesh Lohumi
Tribune News Service

Shimla, September 15
While good monsoon after almost a decade has brought cheers to the farmers, it has hit power producers as prices have plummeted sharply due to poor demand. The state government will be severely affected as the revenue from power is likely to come down by over Rs 150 crore.

The rates of power, which hovered around Rs 7 per unit, came down sharply with the onset of monsoon as farmers did not require power for irrigation.

The situation has turned worse as fund- starved state power utilities are opting for power cuts rather procuring power which is available in the open market. A few states like Uttar Pradesh purchase power only when it is available at very low rates. They are willing to procure power only when elections are round the corner otherwise the preferred option is to impose power cuts. As a result, the rate has been on the lower side, ranging between Rs 2.50 and Rs 2.75 per unit.

The Himachal government, for which power is a major source of revenue, will be severely hit as it has been forced to sell about 110 MW of power from this month through the energy exchange at very low rates. Besides, another 120 MW is being supplied to the state power utility at Rs 3.19 per unit. Further, heavy monsoon rain led to excessive silt in Sutlej and repeated closure of the 1,500 MW Nathpa Jhakri project from which the state gets 543 MW by way of equity share and free power as royalty.

The project remained shut down for 22 days and generated 320 million units less than the target.

The total revenue from power this year will be about Rs 1,100 crore as against the expected Rs 1,300 crore. Last year, the generation came down because of prolonged dry spell.

However, this year a good monsoon has ensured enough discharge in the rivers to boost generation but there are few takers. It is a paradoxical situation with power cuts being imposed by the northern state even when power is available in plenty. If the same trend continues, the economic feasibility of hydroelectric projects coming up in the state will be jeopardised.

More so, because ultra mega thermal projects will make more power available at reasonable rates over the next two years. The situation can be improved only by carrying out distribution reforms in right earnest.