The Electricity Act 2003 was enacted to consolidate laws relating to generation, transmission, distribution, trading and use of electricity, and generally to take measures conducive to development of the electricity industry.
It has been two decades since the Act came into force. Regulatory commission was established under The Karnataka Electricity Reforms Act, 1999. We have witnessed a shift from government-managed boards to licensees under the regulatory regime. However, a shift from the control of government to a regulatory commission has not happened in the real spirit of Electricity Act 2003.
Pursuant to provisions of the Act, the Karnataka Electricity Regulatory Commission (KERC) has issued regulations relating to electricity purchase and procurement of distribution licensee and determination of retail tariff. However the full potential of the electricity sector remains unrealised.
Supply companies have become financially weak and have been incurring losses on account of subsidised supply. In this context, the Karnataka government needs to relook at the constraints which have rendered the sectors unworkable. More importantly, as high-tension (HT) industrial consumption has been reduced over the years since the industries are resorting to procurement of electricity under open access and have taken up captive generation, revenues of distribution companies are under severe financial stress. The paying class of consumers like HT consumers’ contribution is very important since almost 50% of generated electricity goes to un-metered consumers.
Our economic activities are focused on urban-centric development, which deprives the rural areas of facilities, which leads to the latter remaining underdeveloped. Such situations can be avoided only if allocation of resources is equal to both urban and rural areas.
Although Karnataka has installed generation capacity of 32,000 MW, current generation is not meeting the energy requirement of about 17,000 million units (MU) per day. To address the demand-supply gap, the government has invoked Section 11 of the Electricity Act directing all power generators to generate to full capacity and supply the entire power to the state. But the real crux of the problem will start from February-May, when we run short of power. There will be more demand across India — from industry and domestic consumers, besides the agricultural sector needing additional power supply. The state will face serious problems due to power generation inadequacy. How the government is going to handle it is very crucial.
Apart from additional solar generation, Karnataka also needs to ramp up its thermal power generation. As it depends heavily on coal as fuel, the shortage in coal has been exacerbated by inadequate planning and demand forecasting. The government needs to look over the horizon. Karnataka generates 8,079 MW of solar, 5,250 MW of wind, 5,020 MW of thermal, and 3,798 MW of hydro energy. Dependence on coal should gradually reduce. Alternate sources of generation should be explored urgently.
Providing solar irrigation pump sets and calling for tenders for more is a welcome move, but the pace of progress and management is very important.
Management of resources is the need of the hour. Revenue generation is important, but that should not be the only thing the government should concentrate on. While looking at other states for chalking a guarantee scheme, the government must also look at the best examples that can be adopted to improve Karnataka’s power situation. Like Maharashtra, in Karnataka, consumers of electricity should be made participants. Consumers are given certain units free. But if a consumer saves anything in that free power, she/he should get credit. Imagine if there are 1,000 units allotted, and if 300 units are saved by the consumer, a cash equivalent of 300 units should be credited to the consumer’s account. Ultimately the beneficiary takes the responsibility, but that is missing in Karnataka.
The government should look at investment in a holistic way. It should remove its blinkers and stop looking at things in fractions. They should have a broad horizon and form a team of experts who give suggestions and directions for robust development.