SHILLONG, MAY 1: The cash- starved Meghalaya Energy Corporation Limited (MeECL) has failed to collect over Rs 600 crore, the amount of revenue required to contain a distribution loss of 32 per cent annually.
The Fact Finding Team comprising of six opposition political parties revealed this in the report submitted to the state government here on Friday.
The FFT, which include the UDP, HSPDP, KHNAM, NPP, BJP and GNC ,was constituted to make an in-depth study of the power sector and scenario in the state for the government’s necessary action.
“The MeECL has failed to collect revenue of Rs 667.39 crores from the consumers awarded by the MSERC to meet the Annual Revenue Requirement (ARR) of Rs 661.41 crore,” FFT member Jemino Mawthoh told reporters.
The Rs 661.41 was allowed as an ARR to the MeECL by the MSERC for the financial year of 2012-2013.
The Meghalaya State Electricity Regulatory Commission (MSERC) has allowed sales of electricity at 1560.87 million units (MU) and corresponding revenue at Rs 667.39 crore to all categories of consumers based on application of MeECL.
“However, the MeECL could handle only 1274 MU of energy against 1560.87 MU and collected a revenue of only Rs 501 crore against Rs 667.39 crore allowed by the Commission,” Mawthoh said adding “It could bring revenue of only Rs 3.93 per unit on the energy sold.”
Mawthoh informed the actual revenue should have been Rs 5.19 per unit against an ARR of Rs 661.41 crore approved by the commission. He said, “The gap therefore is 1.26 per unit (5.19 -3.93), causing a distribution loss of 32 per cent and this is the gap between the average cost of supply and the average revenue.”
Mawthoh wanted to know how the MeECL will deal with this resultant gap and what will be the rationale to be adopted in order to strike a balance between financial viability of the MeECL and at the same time serving the interest of consumers.
Further, the report of the FFT pointed out that the inability of the MeECL to reduce the Transmission and Distribution losses by 3 per cent every year as directed by the commission which has been one of the main reason for the widening gap between its income and expenditure or between its ARR and the income from the sale of power to different category of consumers.
It also predicted, “The income gap is to the tune of Rs 160 crore during 2012-2013 and will continue to rise if not addressed from a proper perspective,” adding “This gap was happening even before the power sector reform in 2003 and continues till date. The present crisis therefore was bound to happen.”
It also alleged that the government never knew of this gap and neither thought of supporting the utility and no leadership has ever addressed this issue.
The government is already in a debt-trap with the state owned MeECL having pending due for the power it purchased from central generating stations to the tune of Rs 500 crores.
Due to this, the MeECL resorted to power cuts as the CGS had regulated the power supply to the state for want of payment. Consequent to unprecedented 8-9 hours power cut to millions of household, the government offered to bail out the MeECL, it stated.
Questioning the steps taken to liquidate the huge outstanding dues, the report however stated that there is no solution to bail out the supply side of the business which in this case is the Distribution Licensee of the MeECL.
The FFT, however, recommended that the state government look at the demand side and increase the generation and curtail the Transmission and Distribution losses.- By Our Reporter
Well done Fact Finding Team of MeECL.
But the most interesting part is the caption is.
Fact Finding Team consisting of Six Regional Parties.
So here “Divided We Stand & United We Fall”