India Markets closed

Sates provided wrong data to avoid transmission charges

FE Bureau

States have been providing misleading data to save on transmission charges of electricity, a report published by the Central Electricity Regulatory Commission (CERC) pointed out. A CERC task force formed to review the methodology of computing charges for using inter-state transmission systems (ISTS) pointed out that under the existing system, states have been manipulating their load and power generation projections to reduce ISTS charges. However, the report did not provide any figure on the estimated savings the states might have made by producing faulty data.

Under the current point of connection (PoC) mechanism, the allocation of such charges is decided in advance based on projected load/generation for next quarter. It has been observed that different figures are provided for load/generation for the load generation balance report (LGBR) and for PoC, the CERC report reviewed by FE said. It is the responsibility of payers of ISTS charges to project their load/generation, and there is almost no penalty for wrong projections.

Read | Mission Impossible: How Modi government met fiscal deficit target against odds

The LGBR is an annual report covering the month-wise anticipated energy requirement and peak demand.

Cash-strapped discoms are finding it difficult to cope up with rising power costs. Monthly transmission charges have increased by 52% from Q1FY17 to Rs 2,888 crore in Q3FY19. On top of that, the Ujwal Discom Assurance Yojana (UDAY) scheme has placed significant restraint on their fiscal flexibility.

As highlighted by private power generators, discoms frequently press for renegotiating terms of power purchase agreements to find ways to forego penalties and late payment surcharges.

Poor data-management of the state electricity departments have been a longstanding issue. An earlier report on the UDAY scheme prepared by KPMG had pointed out that Union power ministry agencies tend to struggle to reconcile data received from the state-owned distribution companies (discoms). Experts have pointed out that states do not follow uniform formulae and definitions of key parameters and manual data management leads to errors and delays.

Also read | Raghuram Rajan says this will be the key issue for Modi s government as India goes to poll

Inadequate governance, accountability and transparency at discoms and lack of large data-management skills have also been attributed to inferior data quality.

For its UDAY portal, the power ministry has already cautioned the readers to be careful in interpreting the data. The figures are derived from the interim provisional data furnished by the states, which keeps on changing. The Power Finance Corporation has not publicly furnished actual audited data on discom finances after FY16.