Rationale for Karnataka State Power Sector scoring - Ministry of Power

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ERC Key Positives The ERC has performed well in managing to increase tariff levels for subsidized segments with the two tariff orders passed hiking tariffs by 17% and 16% respectively. The ERC has also come out with strong directives aimed at moving KPTCL towards efficiency improvements and better loss reporting. Further there has been an attempt to reduce cross subsidies by increasing agricultural tariffs more than industrial tariffs. Incentives for metering agricultural consumers have been provided in the tariff orders by allowing them to pay the lower of flat rates or metered rates. This has resulted in villages with abundant rainfall opting for metering. . Areas of Improvement The key area of improvement is on the tariff order front. The first tariff order was delayed by 8 months and the second order by 15 months, resulting in an adverse impact on KPTCL’s revenues. The delay has been primarily because of KPTCL filing a case in the high court against the directives issued in the first tariff order. Co-operation amongst KPTCL, KERC and the State Government would promote timeliness of tariff orders and prevent the adverse impact on KPTCL’s financials that a delayed tariff order could have. Operational Parameters (Generation, Transmission and Distribution) Key Positives On the T&D side the efforts taken to meter agricultural customers are commendable especially the “One Time Regularization Drive” for connections and the sample meters being set up in each taluk. The collection efficiency of more than 100% is also heartening as it reflects a reduction in past dues. Manpower levels in the T&D system are among the lowest across reforming states. Areas of Improvement Karnataka has been poor in terms of the performance of the T&D Infrastructure. Overdrawing from the grid has been a problem and steps should be taken to maintain grid discipline. The state’s power sector has also lagged behind in interface metering and metering efficiency, compared to some reforming states. Finances Key Positives Karnataka is the top state in terms of the financial score. Bringing down receivables from 186 to 122 days and accepting the Ahluwalia Committee Recommendations is commendable. The coverage levels are also among the best. Areas of Improvement
Further work needs to get be done in bringing receivable levels down to below 100 days. Gearing levels, while relatively low, can be brought down to more comfortable levels. Due to the delayed monsoons this year, hydel generation is expected to decrease and consequently thermal power purchase costs would increase which could negatively impact the revenue gap in 2002-03. Outlook: The outlook on the ranking is stable. An improvement in scoring is contingent on KPTCL improving its T&D network and KERC passing tariff orders in a timely manner.
Page 1: Rationale for Karnataka State Power
Page 5 and 6: A 2 - 3 year track record on subsid
Page 7 and 8: - Staffing of SERC for smooth funct
Page 9 and 10: Manpower level per MW generated Man
Page 11: D 8 - Projections and outlook on re

Rationale for Karnataka State Power Sector scoring - Ministry of Power

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