By Abha Anindita
SHILLONG:
Load-shedding is a relatively new phenomenon for Meghalaya and has its genesis primarily in the North East Industrial Policy 1997.
According to Prof. Sumarbin Umdor, Head of Department, Economics, NEHU, everything changed over a span of a few years with the introduction of the North East Industrial Policy of 1997 which, in order to attract industry to the North East offered a bouquet of incentives like exemption in income tax for several years, subsidy on capital equipment, on power besides others.
“The gap between demand and supply started to widen around 2004-05, as a number of industrial units started setting up shop mostly in Meghalaya and Assam, leading to an exponential growth in the demand for power over a period of 5-6 years. Meghalaya succeeded in attracting them because we were a power-surplus state then, and our power tariffs were extremely low,” Umdor told The Meghalayan.
Sanjay Goyal, Chairman-cum-Managing Director, Meghalaya Energy Corporation Limited (MeECL), in a conversation with this newspaper, agreed that the bulk of the power in the state is consumed by the High Tension(HT) and Extra High Tension(HT) units.
Goyal said, “The high-value consumers even if they don’t number many utilise a certain percentage of electricity; it would make sense if we got the kind of tariff that could justify the consumption. We cannot bill them beyond a certain percentage, so we are somewhat at a loss here.”
Under the Electricity Act, 2003, which Meghalaya adopted in 2010, the corporation cannot revise the tariff, but has to file a petition and the regulatory authority has to consider all stakeholders, and the industry lobby is said to be quite strong in the state.
Goyal added that the high-value consumers ensure stability in the grid as they guarantee the use of a certain load of power, but the tariff they are paying is certainly not at par with what they are drawing.
However, a 2022 RTI report revealed that despite the relatively low tariff, about 58 units in Umiam and Byrnihat owe a whopping Rs 44 crore since 2005.
Aggregate Technical and Commercial (AT & C) losses
The MeECL has been a loss-making state public enterprise and the reason is largely attributed to high Aggregate Technical and Commercial (AT & C) losses.
Umdor blamed the AT & C losses on the inability to upgrade the system, as the lines and transformers are now well past their shelf lives. He also said that transmission and distribution losses are natural and some loss is inevitable, but cannot be allowed to go beyond a certain level.
The AT & C losses are a measure of the performance of a power distribution system. It reflects the gap between energy input into the system and the units for which payment is collected. High AT & C losses coupled with inefficient cash collection are a major drain on finances. The average loss in the financial year 2017-18 was 41.9 percent, with the two circles of East Garo Hills and West Garo Hills recording losses estimated at 81.3 percent and 69.1 percent respectively, according to a report by the Meghalaya State Electricity Regulatory Commission.
In order to minimise the AT & C losses, a number of states and cities have tried privatising the distribution arm of their power utilities. Should Meghalaya tread the same path?
Umdor cited the example of Bhiwandi Circle in Maharashtra, which introduced a private player that provides electricity to the end-consumers and collects revenue from them.
“It worked wonders for them as they were able to minimise the losses by 30-40 percent and the revenue also doubled. That also helped them plug a lot of leakages,” said Umdor.”
Goyal, though, felt privatisation per se was not necessarily a plausible solution.
“It depends on what we are talking about, whether privatisation of certain circles or the entire state as a whole. But, of course, in Meghalaya where the AT&C losses are the highest, we are trying out the franchise model in a few subdivisions like Phulbari, Dalu, and Mawkyrwat, ” Goyal declared.
“We can try out that model after evaluating more high-loss areas and if at all there are takers who can chip in and bring in some sense of efficiency in the system. Why should I give my profit-making areas to private companies; as a state, we are a mixed bag of loss and profit-making areas,” Goyal added.
In this model, the franchisees bring in their own manpower and are responsible for maintenance and revenue collection; they are billed by the corporation at a particular rate depending on the quantum of loss they are able to reduce.
“The state government now has identified one franchise model, which is in effect for about three years now, so now we are in a position to assess them, preliminary. They had taken responsibility in some areas which suffered high losses, around 80 percent, and in the three years they have brought it down to around 50 percent,” Goyal said.