Streamlining finances of power sector: Energy Secretary

The finances of the power sector, particularly the mortgage burden put up bifurcation and the dip in revenues owing to COVID-19, are a serious concern however the authorities is taking all steps to streamline it, says Energy Secretary and CMD of AP Transco N. Srikanth.

It’s a whopping ₹70,500 crore mortgage excellent and ₹7,000 crore curiosity and debt servicing every year which the State is predicted to handle, in response to him.

In an unique interplay with The Puucho, Mr. Srikanth mentioned, the excellent mortgage instantly after the bifurcation was to the tune of ₹31,000 crore. It had now grown as much as ₹70,500 crore as a result of distinction between the earnings and expenditure and different components.

“There are a bunch of reasons for the debt burden. Post bifurcation, the subsidy arrears from the government, about ₹1,000 crore per month, have not been paid and they are accumulated over a period of time. We’ve lost coal mines to Telangana and are forced to buy coal and transport it to plants here from far away locations which resulted in about ₹3,000 crore burden per annum. In addition, about ₹1,500 crore burden is added in the form of funding new projects,” Mr. Srikant mentioned.

Burden of new crops

The State is including 3,700 MW to its manufacturing capability – 800 MWx3 at Krishnapatnam, 800 MW at VTPS and 500 MW within the Rayalaseema Thermal Power Project. Usually, it prices about ₹5.5 crore per MW however as a consequence of time and value overruns, the capital expenditure has gone as much as ₹9 crore per MW, which is about ₹1,500 crore further price a yr, in response to authorities sources.

COVID loss, dues

Losses as a consequence of COVID-19 state of affairs and lengthy pending receivables from panchayats are additionally believed to be one other ₹6,700 crore burden. In the present monetary yr, there’s a deficit of ₹2,000 crore as a consequence of COVID and resultant dip in industrial exercise. “Panchayat dues on street lighting etc. are about ₹1,200 crore per annum and the total accumulation till date is ₹4,700 crore. Industrial and commercial consumption fell by 30-40%. It has come to normal from October. The State government, on its part, is making arrangements to handle the payments till date,” mentioned Mr. Srikanth.

This aside, the power division can be burdened with wind and photo voltaic adequacy price which is about ₹3,000 crore every year. The ₹600 crore hole between month-to-month earnings and expenditure is one other main think about debt burden.

Solutions

New loans, Central help and State funds are actively used to scale back the debt burden, mentioned the CMD. “We can’t pass on the burden to the consumer as per regulations. So, we are taking new loans, using Central schemes and State funds for the repayments. Last year, the State released ₹17,900 crore arrears of power dues which has reduced the current due at ₹10,800 crore. We are also accessing the Central government’s Atmanirbhar loans to the tune of ₹6,600 crore to pay arrears of power purchase firms and debt servicing,” mentioned Mr. Srikanth.