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Gridco seeks steep hike to meet Rs 3,000 crore revenue gap

In order to make up for the revenue deficit, Gridco has proposed a BSP of 381.29 P/U for 2020-21 for Commission’s approval.

Published: 06th February 2020 09:29 AM  |   Last Updated: 06th February 2020 09:29 AM   |  A+A-

By Express News Service

BHUBANESWAR:  The Grid Corporation of Odisha Limited (Gridco) has requested the Odisha Electricity Regulatory Commission (OERC) for upward revision of bulk supply price by 40.97 pc to meet its annual revenue requirement for 2020-21. Arguing for a hike in the bulk supply price (BSP) before OERC during public hearing of its annual revenue requirement (ARR) and bulk supply tariff applications here on Wednesday, the State-owned power trading utility said its revenue deficit will be around Rs 3,123.66 crore at the existing BSP of 270.47 per unit.

Projecting a net energy demand of 29,181.37 million unit (MU) for the four distribution companies (discoms) - Cesu, Nesco, Southco and Wesco, Gridco said it will sell 28,247.37 MU after a transmission loss of 3.2 pc (equivalent to 933.80 MU).Estimating its power purchase cost at Rs 8866.39 crore, the company calculated average procurement price of power from different sources at 303.84 paise per unit. “Revenue of Rs 7,623.84 crore will be earned by Gridco from sale of proposed energy of 28,187.37 MU to discoms during 2020-21 against the proposed net ARR of Rs 10,747.5 crore at the existing average BSP of 270.47 paise per unit. This will result in revenue deficit of Rs 3,123.66 crore,” Gridco said.

In order to make up for the revenue deficit, Gridco has proposed a BSP of 381.29 P/U for 2020-21 for Commission’s approval. Gridco said it sustained a cumulative loss of Rs 5,326.7 crore since 2009-10 due to gap in the actual power purchase cost and approved cost by OERC. “Gridco had no choice but to resort to market borrowing to meet the payment obligations to keep supplying power to discoms,” the utility said.

Apart from the power purchase cost, the company said it required to pay interest and other financial cost of Rs 477.63 crore, Rs 1,111.74 crore towards bank loan and securitised dues, Rs 308.18 crore as pass through of past arrears and Rs 25.26 crore for establishment and other costs.

Though Gridco has asked for a BSP hike of 326.77 paise per unit for 2019-20 against 276.66 paise per unit in 2018-19, OERC had reduced the price to 270.47 paise per unit. As a result, the company has incurred a revenue gap of Rs 1,189.87 crore in the current financial year till September-end. Gridco has filed a review petition before OERC against the latter’s ARR and BSP rider for 2019-20. It requested the Commission to pass through the financial effect of the review petition while approving ARR and BSP for 2020-21.

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