Smartphone apps help bring reliable power to 1.3 bn people

AT any given minute in India, you can find out how much electricity is for sale and at what price with a few swipes across a smartphone screen — a level of transparency in the nation’s power sector that’s increasing the odds of far-reaching change to end blackouts.

The unprecedented instant access, which shows untapped power supplies and comparatively cheap available electricity while millions go without reliable supplies, highlights deep flaws in the state-level distribution system. The picture painted by the data is increasing pressure on local officials to embrace Prime Minister Narendra Modi’s plan to fix the woes of indebted state retailers so all of India’s 1.3 billion people have access to electricity by 2019.

“There is no escape route for states any more,” said SK Agarwal, a member of Uttar Pradesh Electricity Regulatory Commission. “And that’s a good thing because it forces the distribution companies to become more efficient.”

Required to sell power below cost for years, India’s cash-strapped power distributors stacked up unpaid loans of almost R5 trillion ($74 billion) as of September. The losses have eroded their ability to purchase enough power to meet demands of customers and invest in infrastructure to support new connections and increase efficiency.

Transforming those distributors, operated by India’s states, to run more efficiently and ensure they have funds to purchase greater supplies is key to Modi’s promise of lighting up the $2 trillion economy. Eighteen of India’s 29 states, and one of its union territories, has agreed to join Modi’s debt plan for the state power distributors, according to a tally by the central government as of May 20.

India failed to achieve a sustainable turnaround of the state utilities through at least two previous reform plans, which focused on financial bailouts while doing little to push the states or their utilities to improve efficiency.

Proponents of Modi’s plan say Vidyut Pravah, the smartphone app that updates every 15 minutes with regional power availability, shortages and prices, holds distributors accountable and improves the odds they’ll see through their side of the restructuring bargain.

“There is tremendous pressure on us to perform, to be able to meet the targets set by the central government,” said DK Shar ma, a director at Ajmer Vidyut Vitran Nigam, a power distributor in the northern state of Rajasthan, which is ruled by Modi’s Bharatiya Janata Party.

“We’re trying to ensure that every unit of electricity we supply is metered.”

Rajasthan’s three distribution companies had a combined R850 billion of debt as of last year, the most among all states in India.

Under the debt recast plan, the local gover nment has taken over R600 billion of loans, leaving distributors with debt of R250 billion, according to Shar ma. Bloomberg