Discoms losing Rs 2.5 on every unit of electricity sold, debt at Rs 19,000 crore

The power distribution companies (Discoms) of Haryana are incurring a loss of Rs 2.5 per unit of electricity sold, as a result of which the Discoms owe a debt of over Rs 19,000 crore. To curb the losses and supply adequate electricity (around 20-22 hours daily, both in rural and urban areas), the Discoms are working on introducing certain remedial measures.

Chairman and managing director of Dakshin Haryana Bijli Vitran Nigam (DHBVN) and the Uttar Haryana Bijli Vitran Nigam (UHBVN) Devender Singh said: "The Discoms owe Rs 19,000 crore and continue to bear loss at the rate of Rs.2.50 per unit of electricity sold. The major reasons for this gap between cost of power and return of revenue are high rate of Aggregate Technical and Commercial (AT&C) losses, which at present are 30 per cent. Increase in the price of fuel has also raised the cost of electricity purchase, which increases debt."

"The Financial Restructuring Programme has given relief to Discoms from the pressure of payment of loans for three years. Under the restructuring, payment of the principal amount of loans has been deferred for three years and half of outstanding short-term liability has been converted into equity to be held by the government. With this development, the banks have restarted paying loans to Discoms. But this is only one-time survival. The revenue realisation will have to equalise the cost of supply of power," Singh said.

According to the strategy made by officials of UHBVN and DHBVN, for financial turnaround, the power engineers and workers of the Discoms have been given a responsibility to reduce the cost of supply by 60 paise per unit by reducing the rate of AT&C losses from present 30 per cent to 15 per cent in the next three years.

"Fuel Surcharge Adjustment is the additional fuel cost which was not collected from consumers by the Discoms. The electricity bills of consumers of these months did not cover the actual cost of fuel that distribution companies paid to generators to buy power. Therefore, to make up for the loss that Discoms suffered, the Discoms collect FSA. This is not tariff or a part of the tariff. It ceases to be charged after a specific period, when the recovery of the extra cost on purchase of power is recovered," Singh added.

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