Powerless in Maharashtra

From power surplus till the mid-90s, Maharashtra has become one of the most power-starved states in the country. Till the first half of 2008, the power shortage had by and large spared the industries. But now, the non-continuous process industries are facing 32 hours of load shedding per week against 16 hours earlier. The failure to supply adequate power to industries has seriously dented the image of the state among investors. Industrialists say that the state would find it difficult to attract investment unless the power situation improves. Load shedding in urban areas ranges from four and a half hours to seven and a half hours while villages face power cuts up to 13 hours. This has affected trade, services and even agricultural output. The main reason for this downturn is the failure to increase the generation capacity in last ten years. The last capacity addition was done at Khaparkheda in May 2001. After that there was a gap of six years and a 250 MW unit was commissioned in Parli. In the meantime demand had gone up by 4000 MW and the shortfall increased from 1000 MW to 5000 MW. According to power experts, the problems started when the government decided to hand over the task of augmenting power generation capacity to private players. Till the 1980s, the state government used to allocate 30 to 35% of the budget to the power sector. Gradually, it was reduced to a negligible amount. Unfortunately for the state, the private power projects ran into controversy and as a result, there was no capacity addition. Enron commissioned a 740 MW power plant at Dabhol and was ready with another 1,400 MW when the state government cancelled the power purchase agreement (PPA) due to prohibitively high power tariff. The Bhadrawati power project also ran into legal problems and was shelved. The cancellation of PPA with Enron cost the state dearly as the government was busy settling the dispute for about five years and did not devote any attention to power generation. However, the demand and hence the shortfall went on increasing continuously. Dabhol was finally revived in May 2006 and its capacity was augmented in October 2007. However, Dabhol’s units breakdown frequently and hence, power from that plant cannot be relied upon. At present, five out of six gas turbines of Dabhol are not functioning thereby worsening the power shortage further. Unfortunately, the state government did not learn any lessons from Enron and again relied on the private sector to augment the power generation capacity. Energy Minister Dilip Walse-Patil signed a memorandum of understandings (MoUs) with several power companies for generation of 13,500 MW. He expressed confidence that at least 50% of the MoUs would materialise. Unfortunately, not even one has seen the light of the day However, there seems to be some hope as a few private power plants are coming up. Construction on a 540 MW plant at Warora is in progress and Adani is just about to get started with a 2000 MW plant at Tiroda. The state government has realised its mistake and is going in for capacity addition in a big way. Construction has started on new units having a total capacity of 2,000 MW. Another 3,000 MW unit has been approved. However, these units will start generating power in two to five years but by then, the demand will also increase. A big worry is whether these projects will get completed on time. The expansion projects at Parli and Paras were delayed by more than an year. Central projects have also got delayed thus reducing the state’s central share. The state government claims that Maharashtra will become power surplus by 2012 but the experts feel otherwise. They believe that the power situation can improve only if the government is really serious about the issue. On the load-shedding front, it is generally believed that the practice will continue in the foreseeable future. Failure to generate enough power is not the only problem. The erstwhile MSEB in 1990s used to claim that transmission and distribution (T&D) losses were only 17 to 18 %. However, when Maharashtra Electricity Regulatory Commission (MERC) conducted a scientific survey in 2000, the T&D loss was found to be 40%. In the eight years, MSEB and its successor MSEDCL have been able to reduce it only by 10%. Against a target of 15% set by the Central Electricity Authority (CEA) the T&D losses still are around 30%. High T&D losses are due to rampant power theft. This affects the revenue of MSEDCL and increases the power tariff. Many power experts claim that reduction in T&D losses will reduce the demand for power to some extent. MSEDCL has also not recovered arrears worth thousands or crores. Many of them cannot be recovered due to litigations but more effort by the distribution staff can certainly bring down the figure. The apathy of the power company is evident from the fact that all the agriculture pumps are still not metered in spite of repeated directives from MERC. If this was not enough the state’s power plants are now facing acute shortage of coal. While the generation company Mahagenco blames the Coal Ministry for reducing its allocation, Western Coalfields Limited (WCL) has pointed out that the power company was not able to lift its allotted quota of coal. It was not able to finalise the contract with washery operators which further worsened the situation. The government has swung into action with the crisis reaching alarming proportions and there is some hope that coal stocks would improve by January. While, the government is at fault, the consumers cannot be given a clean chit. A section of consumers resist every attempt to pay for the electricity they have consumed. They use political pressure to prevent anti-theft operations. Even though the state is facing prolonged power cuts, nobody is ready to conserve energy. Despite Diwali being over, people are yet to do away with decorative lighting. People even continue to use airconditioners in winter. Suresh Shinde, a retired MSEB officer, feels that load-shedding can never stop unless people start making judicious use of electricity. “There are several constraints in increasing power generation and there is no alternative to power conservation,” he said.