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A dark UP seeks light from PM Modi

According to the Central Electricity Authority, CEA, the state could not match the peak demand of 20,274 MW of electricity in fiscal 2017/18.

twitter-logo Anilesh S Mahajan        Last Updated: December 18, 2018  | 22:30 IST
A dark UP seeks light from PM Modi

During an election campaign in 2014, at a rally in Gorakhpur, the then prime ministerial candidate for BJP, Narendra Modi, had made access of 24x7 electricity an electoral issue. As the sitting chief minister of Gujarat, he had a good track record in the western state.

So, when he promised that every household in India would get access to electricity, it resonate dwell in Uttar Pradesh. Five years down, Modi is the prime minister of the country and Yogi Adityanath - who was an MP from Gorakhpur-is the chief minister of Uttar Pradesh. But by the end of this year, when most of the households in India will have access to electricity, Uttar Pradesh will continue to lag.

Uttar Pradesh sends 80 MPs to Lok Sabha, so a good showing in the 2019 general elections is critical for both Modi and BJP. In 2014, Uttar Pradesh sent 73 MPs to back Modi (71 BJP + 2 allies from Apna Dal). So it is understandable that Modi would want the 'success' in improving access of electricity as one of his poll planks.

With the Ujwal Distribution Assurance Yojana, UDAY, the government also attempted to clean up the fiscal mess plaguing distribution companies. But Uttar Pradesh lags here as well. According to the Central Electricity Authority, CEA, the state could not match the peak demand of 20,274 MW of electricity in fiscal 2017/18.

The state distribution companies could only supply 18,061 MW - a deficit of 10.9 per cent - when the national average is less than 2 per cent. This is when most of the country's thermal power plants are running at 50-60 per cent capacity. In FY 2016/17, the state's demand supply gap was 9.8 per cent, when demand was 17,183 MW. With more households getting connected, the demand is bound to increase, but so will the gap.

This is largely because the state is unable to improve efficiency. The aggregate technical and commercial (AT&C) losses are 33.08 per cent, which was more than the 30.1 per cent two fiscals ago. The national average is 21.9 per cent. Following their commitments under UDAY reforms, the losses should have come down to 19.36 per cent. It would be nearly impossible to achieve zero loss by next fiscal.

In states with difficult terrain, delay in implementation can be understood, but UP cannot claim this handicap. This state suffers from highly inefficient distribution. The challenge is: a) to give electricity to un-electrified homes, b) to build enabling infrastructure, c) to charge consumers as per their consumption, and d) to formalise illegal connections. To achieve these, the state's distribution companies have to be overhauled. Transmission infrastructure has to be ramped up, agriculture feeders have to be segregated from other supplies, and smart meters have to be installed for better realisation of consumption.

Uttar Pradesh engaged with some PSUs - it has a joint venture with PowerGrid for infrastructure; with Energy Efficiency Services Ltd (EESL) to procure smart meters; and with NTPC to buy extra electricity. But overall, the state's pickup continues to be weak.

The power ministry's statistics show that by December 17, 2018, all households in 17 states were electrified and six more may join the club in the next fortnight. But Uttar Pradesh still has to electrify about 5.4 million houses, which also forms nearly 70 per cent of the pending work nationally.

The state not only requires a massive ramp up of the transmission facilities, but also of the distribution companies. In 2013, rating agencies such as ICRA and CARE rated five distribution companies in the state as worst in the country.

The challenges for the state have always been huge. Cumulative losses of Rs53,200 crore were bleeding the five distribution companies by Rs8,000 crore annually.

Two years ago about 11.2 million homes were without electricity. So, the pending 5.4 million homes now may be an achievement, but it will be difficult for the Prime Minister and his colleagues to explain this to the electorate.

In September 2017, under Saubhagya, or Pradhan Mantri Sahaj Bijli Har Ghar Yojana, Rs 16,320 crore was allocated for taking electricity to all houses, after connecting pending 597,464 census villages. In April 2018, the power ministry announced that all villages were connected. But Uttar Pradesh and Assam are the two states that are falling way behind and are likely to miss the December 31 deadline.

Officials in Uttar Pradesh's electricity department told Business Today that there is an improvement in data collection and other parameters. "This might not show a rosy picture of the state, but for sure it is showing the correct one."

By March next year, when PM Modi will hit the campaign mode, the logic of improvement in data collection may not work but the attempts at ground will.

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