Himachal hydropower woes – more generation, lesser returns

Shimla: Tapping into every potential hydro power generation site has saddled the state with a problem of plenty for even though a late spurt in per unit electricity prices has made up for some of the revenue losses for energy surplus Himachal but early summer rates that had dipped to all time lows has the finance department worried about mopping up enough resources to meet budgetary demands.

Revenues from sale of power is a major non-tax revenue source for the government and if per unit energy prices drop, it does cause a big loss to the state, says Srikant Baldi, principal secretary finance.

Himachal a revenue deficient state has come to rely heavily on power sales as a reliable source but as more hydro power get commissioned each year increasing generation, state power revenues that peaked at Rs 1255 Cr in 2008-09, dropped to Rs 1150 Cr in 2010 and was Rs 1050 crore, last year. In 2003-04 the state earned only Rs 29.60 crore from energy sales.

Per unit energy rates which used to command a summer price upto Rs 8 some years ago were hovering around Rs 3 in April-May, said Deepak Sanan, principal secretary power.

For the past week there has been a spurt in prices as demand for meeting farm needs in states that have received deficient rains to save crops increases.

“On spot sales, last week through the energy exchange we were able to sell at Rs 6 per unit,” said Neeraj Kapoor, an engineer who oversees the power sales for the state.

With the 1000 MW Karcham Wangtoo private sector hydro power plant and the central power sector 231 MW Chamera III plant having come on stream in the year, the governments pool of 12% free power availed from hydro projects has increased substantially.

Besides, the Supreme Court award of increasing the power share from Bhakra Beas Management Board projects from 2.19 to 7.12 percent has also added to the pool of surplus power with the state that has increased from about 630 MW last year to about 1000 MW in the current season.

However, over 50 percent deficient monsoon rains in the hills have impacted generation. “The overall power available for sale with us is less than last year even though more power projects have come on stream,” says Sanan.

Treading with caution on entering long term contracts after the Uttar Pradesh Power Corp Ltd failed to pay up Rs 190 Cr for energy bought just before the state assembly elections; a tender floated last month for selling power on long term basis had no takers.

Saddled with surplus power, a highly perishable commodity that cannot be stored, and having had to sell at low rates during peak summer days when there was demand but cash strapped distribution companies preferred to impose power cuts rather than buy even cheap power only brought home the irony for us that the more one produced, the lesser one earned, remarked Sanan.

As Editor, Ravinder Makhaik has nurtured Hill Post for over a decade. A chequered path had him drift from managing family owned apple orchards, to turning a documentary filmmaker, to a journalist - with India’s leading television networks and newspapers, to boot strapping in founding Start-Ups. He lives in Shimla.

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