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Power 20:20 | August 2015

State which has best implemented power reforms - Maharashtra

The present Maharashtra government has put forth various concerns regarding the state´s evacuation infrastructure, cost of power generation, cost for power distribution infrastructure and also about lowering of tariffs for industrial units. The government has submitted detailed plans for the same to the Centre (based on internal assessment), seeking Rs 10,000 crore of assistance under the Deendayal Upadhyay Gramjyoti Yojna. If implemented, this will fulfil the state´s commitment to strengthen its power infrastructure.

Maharashtra´s three state-owned power utilities are looking to raise money by issuing bonds as a way to refinance high cost debt and reduce their interest burden. If successful, this would be among the first instances of a state utility raising money through bond issue to refinance existing debt and could help set a precedent for other states, where discoms are struggling under heavy debt. In the case of Maharashtra´Maharashtra State Power Generation Company Ltd (Mahagenco), Maharashtra State Power Transmission Company Ltd (Mahatransco) and distribution company Mahavitaran Ltd, have total debt of Rs 54,000 crore.

Pricing game
The state is likely to lower power tariff for industries, without subsidy or cross subsidy, as continuously demanded by industrialists and will improve investor sentiment in the state. The government has already prepared a plan to be submitted to the Maharashtra Electricity Regulatory Commission (MERC), whose prerogative it falls under to take a concrete decision on the lowering of tariffs.

Timelines for reforms
Earlier, when the government planned these reforms, it was for five years. However, after rounds of meeting with the Power Ministry, it was suggested to implement the same in the next two years. The main emphasis was to streamline and complete basic infrastructure related works on an urgent basis. This includes improvement in PLF and feeder separation to improve efficiency (especially in infrastructure deficit areas) and the cost factor. In addition, the government has also asked the Centre to increase coal supply from 20 lakh mt to 25 lakh mt, which is under consideration.

Image makeover
The image makeover is just not for Mahadiscom but for Mahagenco and Mahatransco as well. For this, the state has decided to come up with the ´Feeder Manager´ scheme to be implemented in rural areas with participation of locals to improve efficiency and collection efforts. Meanwhile, to achieve the efficiency of T&D companies, which exert huge losses due to power theft and unpaid bills, the ´Feeder Managers´ will be entrusted with maintaining the feeder, recovering the dues of bills from people and coordinate with the district offices. This will not only decentralise the process, making it much more effective and transparent, but also provide jobs for electrical engineers. The government has decided to release 20 per cent incentive if they recover Rs 1 lakh.

Renewable energy
The new BJP-led government in Maharashtra has already passed its new energy policy, which proposes a marked expansion in renewable energy. The program envisions additional installation of 14.4 GW of renewable energy by 2020.

Compared with the Centre´s guideline for the development of a sustainable energy supply, Maharastra has been somewhat reluctant. While PM Modi´s government has set itself the ambitious goal of a total output of 100 GW by 2022, many observers have been missing a clear commitment from Maharashtra to the country´s energy future so far. The new policy could bring the state to the fore, making it lead the expansion of solar energy.

Parameter Details
State Maharashtra
Capital Mumbai
Population 1,123,72,972
GDP Rs. 1,476,233 cr
Literacy Rate 82.9 per cent (6th)
Utilities MAHAGENCO (Generation),
MAHATRANSCO (Transmission),
MAHADISCOM (Distribution),
MEDA (Renewable)

Future projects of Maharashtra
Name of Project Capacity in MW Commissioning Year
Bhusawal unit 6 1 x 660 2018-2019
Paras unit 5 1 x 250 2018-2019
Nashik unit 6 (Replacement) 1 x 660 2019-2020
Dondaicha Project 5 x 660 2020-2021 to
Uran GTPS Block-I: 406;
Block-II: 814
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