<p>In recent memory, it is difficult to find a year when there was no blackout or brownout in Karnataka. What is unusual about the current crisis is that it is coming soon after the rainy season when all our hydel reservoirs are full and we should be able to generate maximum power. Unfortunately, instead of learning from the never-ending power crisis, every government, past and present, has been trying to find fault either with the Central government or with external problems like Telangana agitation or generator breakdowns etc. None of the governments has taken time to study the real issues. <br /><br />As a result of the World Bank pressure to meet the requirement of securing loans, the state government carved out seven autonomous companies from the earlier Karnataka Electricity Board (KEB). The objective of breaking up a totally integrated KEB into generation, transmission and distribution was that smaller, and autonomous companies will be better managed with less political interference. <br /><br />An independent regulatory body, Karnataka Electricity Regulatory Commission was also established to ensure efficient operations by these monopolies. Unfortunately none of these bodies have functioned the way they were expected to. Unless we bring about dramatic improvement in the operations of all these institutions, all the promises of solving power crisis by our elected representatives will remain a dream.<br /><br />Lack of planning <br /><br />If KPCL had an efficient management, currently they could have generated 100 million units per day instead of mere 76 to 80 million units. In addition, Escoms can secure about 60 mu from central generators, renewables and Udupi Power Corporation LTD. KPCL can also buy to meet not only peak load requirement but also base load from several private generating companies. Besides if the government implements demand side management recommendations made by several experts, it is possible to develop a scenario where Karnataka can avoid power crisis. Even the unrestricted daily demand of 160 to 170 mu can be met with the existing generation capacities with the judicious and timely purchase of power from private generators. But obviously there is no planning. <br /><br />KERC is not just a regulatory body with just one function of fixing the power tariff. Even while executing such an important task, it has not been doing an efficient job. Escoms have different cost structures, distribution losses, and even power supply sources. But KERC has uniform tariff structures for all of them. Another very important task of KERC is to ensure that all escoms are managed efficiently so that consumers do not have to pay higher tariff. <br /><br />KERC should not fix tariff based on cross subsidisation. If the government wants to subsidise farmers, and the poor, it should reimburse escoms. But KERC should fix tariff purely based on the cost to supply these subsidised consumers. KERC should conduct its own short term and long term studies to find out the supply/demand balance in power supply using experts. Based on those studies KERC should advice the government on proper policy and assist the power companies in making timely investment. KERC has not yet developed expertise to undertake these tasks. <br /><br />Escoms are supposed to be autonomous with an efficient management unlike KEB which was managed as one of the government departments. Unfortunately they are still managed as mini KEBs. The most basic principles of management are not followed in the operations of escoms. There is a huge difference between professional management and bureaucracy-driven administration. <br /><br />In today’s acute power crisis situation, if escoms were really run like a modern corporation, all their managing directors should have been fired for dereliction of duties. <br /><br />However they cannot be fired today. None of them have autonomy; they do not have power to hire and fire their managers. Most of the engineers working for these escoms are sourced from other government departments or KPCL. Can an IAS officer who has no background in power manage a technically sophisticated company like an escom? <br /><br />Examples of management failures in present crisis are so obvious, it makes a sad reading. Udupi Power Corporation Ltd has a new generator of 600 mw ready to generate if it can get environmental clearance. Why was this not done a long time back? At Raichur thermal power plant with eight generators, overall plant load factor is less than 60 per cent. Under an efficient management it would be more than 90 per cent. An efficient management would have increased inventory of coal in anticipation of Telangana agitation. <br /><br />It is high time the government assesses its financial situation to decide how much subsidy it can afford in power sector. According to some estimates, the government owes more than Rs 10,000 crore to escoms. <br /><br />If the financial position of escoms does not improve, all the plans of investing in several power plants exceeding 10,000 mw in the next 5 to 10 years will remain a dream.</p>
<p>In recent memory, it is difficult to find a year when there was no blackout or brownout in Karnataka. What is unusual about the current crisis is that it is coming soon after the rainy season when all our hydel reservoirs are full and we should be able to generate maximum power. Unfortunately, instead of learning from the never-ending power crisis, every government, past and present, has been trying to find fault either with the Central government or with external problems like Telangana agitation or generator breakdowns etc. None of the governments has taken time to study the real issues. <br /><br />As a result of the World Bank pressure to meet the requirement of securing loans, the state government carved out seven autonomous companies from the earlier Karnataka Electricity Board (KEB). The objective of breaking up a totally integrated KEB into generation, transmission and distribution was that smaller, and autonomous companies will be better managed with less political interference. <br /><br />An independent regulatory body, Karnataka Electricity Regulatory Commission was also established to ensure efficient operations by these monopolies. Unfortunately none of these bodies have functioned the way they were expected to. Unless we bring about dramatic improvement in the operations of all these institutions, all the promises of solving power crisis by our elected representatives will remain a dream.<br /><br />Lack of planning <br /><br />If KPCL had an efficient management, currently they could have generated 100 million units per day instead of mere 76 to 80 million units. In addition, Escoms can secure about 60 mu from central generators, renewables and Udupi Power Corporation LTD. KPCL can also buy to meet not only peak load requirement but also base load from several private generating companies. Besides if the government implements demand side management recommendations made by several experts, it is possible to develop a scenario where Karnataka can avoid power crisis. Even the unrestricted daily demand of 160 to 170 mu can be met with the existing generation capacities with the judicious and timely purchase of power from private generators. But obviously there is no planning. <br /><br />KERC is not just a regulatory body with just one function of fixing the power tariff. Even while executing such an important task, it has not been doing an efficient job. Escoms have different cost structures, distribution losses, and even power supply sources. But KERC has uniform tariff structures for all of them. Another very important task of KERC is to ensure that all escoms are managed efficiently so that consumers do not have to pay higher tariff. <br /><br />KERC should not fix tariff based on cross subsidisation. If the government wants to subsidise farmers, and the poor, it should reimburse escoms. But KERC should fix tariff purely based on the cost to supply these subsidised consumers. KERC should conduct its own short term and long term studies to find out the supply/demand balance in power supply using experts. Based on those studies KERC should advice the government on proper policy and assist the power companies in making timely investment. KERC has not yet developed expertise to undertake these tasks. <br /><br />Escoms are supposed to be autonomous with an efficient management unlike KEB which was managed as one of the government departments. Unfortunately they are still managed as mini KEBs. The most basic principles of management are not followed in the operations of escoms. There is a huge difference between professional management and bureaucracy-driven administration. <br /><br />In today’s acute power crisis situation, if escoms were really run like a modern corporation, all their managing directors should have been fired for dereliction of duties. <br /><br />However they cannot be fired today. None of them have autonomy; they do not have power to hire and fire their managers. Most of the engineers working for these escoms are sourced from other government departments or KPCL. Can an IAS officer who has no background in power manage a technically sophisticated company like an escom? <br /><br />Examples of management failures in present crisis are so obvious, it makes a sad reading. Udupi Power Corporation Ltd has a new generator of 600 mw ready to generate if it can get environmental clearance. Why was this not done a long time back? At Raichur thermal power plant with eight generators, overall plant load factor is less than 60 per cent. Under an efficient management it would be more than 90 per cent. An efficient management would have increased inventory of coal in anticipation of Telangana agitation. <br /><br />It is high time the government assesses its financial situation to decide how much subsidy it can afford in power sector. According to some estimates, the government owes more than Rs 10,000 crore to escoms. <br /><br />If the financial position of escoms does not improve, all the plans of investing in several power plants exceeding 10,000 mw in the next 5 to 10 years will remain a dream.</p>
