Excess transmission capacity has burdened consumers: CAG

The Comptroller and Auditor General (CAG) has pulled up the Karnataka Power Transmission Corporation Limited (KPTCL) for installing excess transmission capacity in the state, noting that it “was an avoidable burden placed on the consumers.”

According to the report tabled in the Assembly on Wednesday, the KPTCL invested in excess transmission capacity of 5,230 MVA (megavolt ampere) involving a capital cost of Rs 3,870 crore, for which consumers were charged under transmission tariff.

Moreover, failure of authorities in ensuring Right of Way for transmission lines hampered works in 24 out of 53 line route or substation locations estimated to be around Rs 800 crore.

The Manual on Transmission Planning Criteria issued by Central Electricity Authority (CEA) had issued directions on new transmission additions required for strengthening the power transmission system. States were allowed to have 27% excess transmission capacity.

The CAG noted that transmission capacity was in excess of the requirements in all five years starting 2014-15 to 2018-19. For instance, while the peak electricity demand of the state was 12,877 MW, maximum transmission capacity required as per CEA guidelines was for 16,354 MW.

“Against which, the actual transmission capacity in the state stood at 20,800 MW as on 31 March 2019. Audit observed that the existing transmission capacity was in excess of requirement in all the five years, varying between 27% and 49% during 2014-15 to 2018-19,” the report said.

At the end of March 2019, excess transmission capacity in the state involved a capital cost of Rs 3,870 crore. “This cost was an avoidable burden placed on the consumers as the cost incurred on creation of these assets was factored into transmission tariff recoverable from the Distribution licensees,” the report said.

The audit also observed lapses in ensuring Right of Way in as many as 24 out of 53 projects costing Rs 800.19 crore, despite “favourable rulings” of various courts and strong provisions of the Indian Telegraph Act. Authorities did not properly ascertain forest lands, for instance, before taking up projects.

Quoting cases where officials failed to perform due diligence before taking up works, the report indicated that it was “more likely a case of sub-optimal efficiency by the authorities concerned rather than a mere case of non-compliance due to reasonable systemic limitations.”