SHOCKER: 50% FREE POWER WASTED AP COSTLIEST STATE IN TERMS OF POWER TARIFF
Power for agricultural sector stolen, sold, deficit shown and FSA burden passed on to consumers
The state government’s decision to give free power to the agricultural sector has had ripple effects on the power tariff and even FSA charges levied on all other sectors.
The concept of free power was introduced with the idea to equalise power subsidy to farmers who draw water from borewells to those who use free canal water under irrigation schemes. Insiders suggest that the huge shortage of power being shown is an induced shortage with pilferage of power due to corruption. Yet farmers are not even getting five hours of power supply as against the announced seven hours supply.
“After free power was introduced, it was made mandatory for a budgeted fund to be allocated so that any fluctuations will be taken care of by the budget. However, many years down the line, corruption is growing and power is being illegally sold, showing a deficit. Utilities are saving money by giving less than five hours of power to the agricultural sector in the state and despite this manipulation, surplus charges are being passed on to other consumers,” said Dr S. Jeevananda Reddy, former chief technical advisor to the World Metrological Organisation and expert at the Food and Agriculture Organisation. He was also instrumental in shaping the free power scheme of state government.
The fact is that there is absolutely no incentive for efficiency to farmers who get free power, and pumpsets run at 18 to 20 percent efficiency as per estimates given by APTransco officials. With proper use of capacitors, good quality winding and bearings, the efficiency of the pumps can be increased up to 60 percent. This means that more than 50 per cent of the free power supplied is being wasted.
“It was pointed out by energy auditors two years ago that the pump set efficiency was as low as 25 percent. Again in the agricultural sector, if an ISI pump with a capacitor is in use, 30 per cent of power (6000 MU) can be saved. But no step is taken due to corruption at various levels,” pointed out A. Punna Rao, convener of the Praja Energy Audit Cell.
“Farmers are not getting the full benefit of the free power scheme... power is sold and a deficit is finally shown; hence the FSA for agriculture should not be levied on consumers,” adds Dr S. Jeevananda Reddy.
The industrial sector, opposes the huge cross-subsidy being passed over and has made several representations before the APERC against the FSA quotient being passed on. “State government has to pay the distribution licensee, the cost of power supplied to the agricultural sector,” said M.V. Rajeshwara Rao, secretary general of Fapcci. The state has achieved the dubious record of going from being the cheapest power tariff state in the country to one with the costliest power tariff in a number of categories in a span of just three years, adversely impacting both industrial and domestic sector in a big way.
Andhra Pradesh had the lowest tariff for industrial consumers in comparison to other states like Gujarat, Karnataka, Tamil Nadu, Maharashtra, Rajasthan and Uttarakhand. However, with the new hike, power tariff in Andhra Pradesh is all set to become the second highest for the industrial sector. The power tariff for the HT industrial consumers which was `3.51 per unit in April 2010 has touched `6.8 per unit, registering a 60 per cent increase in tariff over the cost of service.
According the estimates of industrial bodies nearly 2.5 lakh jobs have been lost due to 12,000 industrial units being declared as Non-Performing Assets (NPA)s. Blaming the unfair cross subsidy offered to the agricultural sector being loaded on to industries for the sorry state of affairs, the industries have vociferously opposed the move.
“Of the total 14,866 crore subsidy requirement, the government has proposed giving `5,000 crore while proposing to collect the remaining from the industrial sector. However, if the government has proposed free power, it should bear the entire cost. Industry needs subsidy and incentive but definitely not this kind of cross subsidy, especially with only 50 per cent power supply since September 2011.
The sector is already facing a grim situation and this is like shunting industry from the state,” said FAPCCI (Federation of Andhra Pradesh Chambers of Commerce and Industry), President, Devendra Surana.