The looming bifurcation of the Andhra Pradesh is likely to lead to an
immediate increase in power tariffs in both new states. While the
division of the state and the resultant division of the energy related
assets will be dealt with geographically, the allocations from Central
Generating Stations will be made on the basis of energy consumption
pattern of the last five years.As per experts, the immediate impact is expected to be an increase in
cost of service. However, the "to be formed" Telangana may be hit
harder by the divide. The current crisis situation in terms of power
shortage, increase in tariffs, shortage of resources like coal and gas
as well the financial soup that the four state discoms are into, may
make things more difficult for both sides. Going by the location of power generating stations and the actual
power generation, the Seemandhra region currently generates 60 per cent
of the state's power and the Telangana region generates the remainder.
However, going by the consumption pattern, the consumption of the
Telangana region is 60 per cent while that of Seemandhra region is 40
per cent. While this is a distortion in the current setting, basing the
division of assets and allocations on these figures may lead to further
distortion as per experts. While both sides got a fair share of allocations with 56 to 60 per
cent of the share going to Telangana, it is the cost of service, which
will be a cause of concern. "This formula that has been worked out, will
only lead to distortion as the consumption pattern in the state is
lopsided towards Telangana due to undue importance given to Hyderabad
and Ranga Reddy districts. Even during the peak summer power crisis, Hyderabad and Ranga Reddy
districts were suffering the least power cuts, from three to four hours,
while in other districts it was as much as 18 hours in a day. This
thereby gives a wrong idea of the consumption pattern in the region,"
said power sector expert and convener of Centre for Power Studies, M.
Venugopal Rao.
While both sides might face difficulties posed by the bifurcation,
the to-be formed Telangana state will be at an increased disadvantage
due to special problems like having more of hydel capacity, which makes
it dependent on the monsoons."The 900 MW Srisailam Left Bank Power House being a costlier
generation option, especially during the drought years, will put
Telangana at an added disadvantage. The power generated in these hydel
stations can go up to Rs 9 to Rs 10 per unit," added the expert. The Telangana region currently has an installed capacity of 5,850 MW
most of which is in hydel capacity, and a demand of roughly 7,000 MW.
"While this has, to some extent, been covered with larger allocations
from the Central Generating Stations, this will not be enough to balance
out the power requirement. In fact, with many disadvantages, the Telangana region is most likely
to see a huge increase in power tariff unless the to-be formed
Telangana government is ready to offer a huge subsidy," said a senior
official from APtransco.
Currently, the entire state has an installed capacity of 16,350 MW of
which 10,500 MW falls in the Seemandhra region and 5,850 MW is in the
Telangana region. Also, the fact that about 10 lakh of the total 16 lakh
agricultural pump sets that currently get free power are located in the
Telangana region which are contributors to Transmission and
Distribution losses, will be a huge challenge to meet. "Considering the existing shortage in the region and with the demand
expected to grow at 10 to 12 per cent, the existing capacity addition
plans for the region are very meager. Currently, only Bhopalpally Stage
II, which is 600 MW, is expected in 2013-15 and another 600 MW thermal
power plant by Singareni, is expected after two years.
Of the 5,850 MW installed capacity that Telangana region has over
2,400 MW is hydel and is largely dependent on the monsoons, bringing
down the overall effective capacity to roughly 4,000 MW. At current
market rates, energy imports may cost Rs 6,000 to Rs 10,000 crore each
year. "Sharing of power from generating stations should not be allowed as
it will only lead to more complications related to sharing," says power
expert and coordinator of Telangana Electricity Employees' Joint Action
Committee, K. Raghu. There are several grey areas in the Cabinet Note on bifurcation and
the division of the power sector, like sharing of the transmission
network, management of APGenco, APTransco etc.
Experts express serious doubts about the legality of joint management
of such resources. Also the issue of sharing of power between the two
states would mean 56 per cent power being transmitted from Seemandhra to
Telangana and 44 per cent being transmitted from Telangana to
Seemandhra region at different times. As a result, there will be an a
transmission cost escalation which will ultimately fall on the consumers
on both sides.
As per the Cabinet Note, transmission lines of 132 KV and higher
voltage across successor states will be deemed as interstate
transmission system lines. Transmission lines falling entirely within a
state's territory shall be transferred to the respective state
transmission utilities. Till the respective state transmission utilities
become functional, APTransco will continue to function as the
transmission utility for both successor states. "There will be many transmission lines of 132 KV and 220 KV across
the borders of successor states. This may cause some problems as Andhra
Pradesh has very few inter-state lines with Tamil Nadu, Karnataka,
Maharashtra and Odisha, perhaps in single digits. Compared to these
states, the number of inter-state lines between successor states will be
huge," said a former senior official from AP Electricity Regulatory
Commission.
The state discoms together have long-term power purchase agreements
with private power manufacturers, which are all meant to continue as per
the current arrangement.
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