Bescom revenue gap a staggering Rs 1,540 cr

A far cry from previous profit-making years; losses for three Escoms too.

Once considered an electricity supply company (Escom) which can sustain the entire energy sector in the State, the Bangalore Electricity Supply Company (Bescom) no more wears the tag as its revenue gap stood at Rs 1,540 crore for the year 2013-14, according to the recent submissions before the Karnataka Electricity Regulatory Commission (KERC).

Seven years ago, the Bescom was the only profit-making distribution company after the Escoms were formed in early 2000s.

With its innovative steps to bring down distribution losses, billing efficiency and zero transformer failures, the company was recognised as the country’s most successful Escom. So much so that the electricity boards of several states sent their representatives to study Bescom’s success story and replicate it back home.

All that is, however, history now as the Bescom has topped the list of loss-making power companies in the State. Its revenue gap stands at Rs 1,540 crore for 2013-14, up from Rs 232 crore the previous year, while its energy loss is 13 per cent. The Bescom, which accounts for nearly 50 per cent of the total energy consumed in the State, has surprised many people in the sector. Interestingly, the company has been witnessing a constant increase in consumption by the industrial, commercial and domestic sector.

Officials in the energy sector attribute the loss to several reasons: expensive energy purchased from outside, the gap in billing the installations and billing inefficiency.
“Nearly 8-10 per cent of the installations are not billed properly and the billing efficiency is just 92 per cent. This makes a big difference,” said an official on the condition of anonymity. “As the State does not generate sufficient energy, the Escoms depend on energy purchased from outside, which costs Rs 5-5.50 per unit as per the KERC directions.” Interestingly, most of the existing Power Purchase Agreements (PPAs) entered into by the power sector are short-term ones and thus violate the KERC directions which call for long-term agreements.

Three others are no better

The situation is same with three other Escoms. The Mangalore Electricity Company (Mescom) posted a revenue gap of Rs 340 crore in 2013-14, a far cy from the zero loss the previous financial year.

The Chamundeshwari Electricity Supply Company (CESC) showed a loss of Rs 270 crore, down from Rs 397 crore the last year and the Gulbarga Electricity Supply Company’s (Gescom) loss is Rs 380 crore, up from Rs 160 crore the previous year.
The four Escoms’ total revenue gap is Rs 2,530 crore for 2013-14. But their projected gap for 2014-15 is Rs 2,200 crore.

Hescom making profits 

Interestingly, the Hubli Electricity Supply Company (Hescom), which made a loss of
Rs 684 crore in 2012-13, showed a profit of Rs 41 crore in 2013-14. This is the first time the company has recorded profit after it was formed.