Create holding company to oversee power supply, government panel says

A government-appointed committee recommended the creation of a holding company to oversee the supply of electricity to all parts of the state.

This is one of many recommendations aimed at streamlining power purchase, debt management and cash management as the five Escom were debt-ridden with dues to the tune of 29,764 crore rupees for the year ending March 2022.

The one-man committee headed by retired IAS officer Gurucharan Gollerkeri submitted its report to Chief Minister Basavaraj Bommai on Monday.

The government’s unpaid power purchase duty was estimated at Rs 16,400 crore, according to the report.

It also recommended the formulation of a national energy policy, a national energy planning council and an energy directorate.

A tariff rationalization plan should also be drawn up, the report said.

Under the proposed restructuring of the power companies, the holding company will manage power purchase, debt management, power purchase agreements and loan agreements.

The new company will handle “all financial functions except day-to-day maintenance expenses,” the report said.

Under these conditions, Escoms will only have financial freedom for maintenance expenses, which contrasts with the wide range of financial powers it has.

Agricultural feed

The report also calls for rationalization of agricultural power supply pointing out that Karnataka has 30 lakh of unmetered (IP) irrigation pumps which receive free power supply, which the committee says is “a concern major for the government”.

Converting the subsidy of IP sets into a “funded liability” and reducing the exposure to the state budget, separating agricultural supplies from the electricity distribution network, introducing a direct transfer of benefits to subsidize actual electricity consumption by IP sets and metering of IP sets are part of the recommendations. .

These measures are expected to reduce the financial burden on the state by providing free power supply to IPs.

Other reforms include levying an electricity tax, increasing the captive consumption tax, renegotiating high-cost power purchase agreements, studying labor work at Escoms and the reduction of transmission costs.

Resource mobilization

The report predicted that four measures could generate additional resources to the tune of Rs 6,624 crore: price intervention measures could generate Rs 750 crore, administrative measures Rs 4,500 crore, efficiency measures Rs 400 crore and the new flow measures Rs 974 crore, the committee said. .

These measures involve selling high-voltage electricity to consumers at a reduced rate, reducing domestic consumer cross-subsidies, maintaining the electricity tax collected by Escoms, selling more electricity, reducing counters and commercial losses, among others.

Alan A. Seibert