Vijayawada: Drastic revenue fall taking toll on power sector

Vijayawada: The State government has represented to the Centre to extend financial aid to the beleaguered AP power sector that is struggling hard due to the severe financial crisis with sharp decline in power consumption, revenue collections and increasing burden of paying fixed charges to power generators during the nationwide lockdown.

The Centre has nominated Aniruddh Kumar, Joint Secretary for Union Ministry of Power, to coordinate with the State government during lockdown period.

According to information, the Covid-19 lockdown crisis has badly hit the State power sector and power consumption has fallen by 20 per cent and nearly 80 per cent of revenue collections were affected. With lockdown in force, it is estimated that there will be a reduction of 3,200 million units (MU) in electricity consumption and a loss of Rs2,500 crore in revenue collections during the first quarter (April to June-2020).

In fact, the revenue collections of Discoms dropped by 36.73 per cent in March and the total sales of power fell to 4,500 million units in the same month from the expected range of 5,000 MU to 5,500 MU.

On the other hand, the State government has agreed to completely waive power charges of micro, small and medium enterprises (MSMEs) for three months (April, May, June) which accounts for Rs 188 crore following requests from various industries associations seeking waiver of electricity bills as the industries have remain closed due to lockdown.

The issue of paying fixed charges to power generators will become a big burden to the Energy department as revenue is falling drastically.

According to officials, the Discoms have to pay Rs 7,500 crore per annum to generating stations and Rs 1,450 crore to Power Grid Corporation of India Limited (PGCIL) towards fixed cost every year. The DISCOMs receive Rs 6,500 crore by way of minimum demand charges (fixed costs) annually from the consumers. "This has become a major blow to Discoms," said NSrikanth, Principal Secretary of the Energy.

Despite this, the State government is committed towards providing 24x7 power supply to domestic consumers and nine hours daytime free power supply to agriculture. The government, for the first, has agreed a subsidy of Rs 1,707 crore to domestic consumers in the 2020-21 tariff order. The government is also giving subsidy of Rs 8,354 crore for agriculture, Rs 775.55 crore for aquaculture, 440.1 crore for SC, ST households and Rs 35 crore for others.

The total subsidy burden on government for year is Rs 11,311 crore and Rs 943 crore per month this financial year.

Now, the State government is looking at the Union government for financial assistance to cope with the crises.