Falling prices, few buyers make Himachal financially powerless

Falling prices of electricity generated in the state and lack of buyers have left Himachal Pradesh virtually powerless, financially.

Besides tourism and horticulture, hydropower is a major source of revenue for the state. In 2011-12, the state earned Rs.772.67 crore by selling power to other states.

“In the past five years, the hydropower generation in the state has gone up 40 percent but the selling rates have dropped by more than 50 percent,” Chief Minister Prem Kumar Dhumal, who also holds the power portfolio, told IANS.

He said the cash-starved distribution companies, which were procuring electricity in bulk, are now opting for cuts.

“You know in most of the states the power cuts are ranging up to 18 hours in a day, but they are not buying power. The states neighbouring Delhi are allowing the industrial houses to use 24 hours diesel generators.

“Even the distribution companies are shirking to enter into long-term purchase agreements,” said Dhumal.

Himachal Pradesh, which has a potential to generate about 23,560 MW, is facing a problem of selling surplus power. Currently, 7,913 MW of hydropower has been harnessed by the central and state governments, private players and joint venture companies.

The selling rate of electricity has come down drastically in the past five years.

“On an average the purchase rate was Rs.5.78 per unit in 2007-08. It came down to Rs.5.56 per unit in 2008-09, Rs.5.15 in 2009-10, Rs.4.11 in 2010-11, Rs.2.83 in 2011-12 and this fiscal it is expected around Rs.2.50,” he said.

Officials said in 2007-08 the state had a surplus of 3,000 million units (MUs). In 2011-12, it increased to 3,900 MUs and in 2012-13 it’s expected to be around 4,200 MUs.

The state had sold power to Uttar Pradesh but it has failed to clear the dues.

“Uttar Pradesh has purchased electricity from us. We have to take Rs.200 crore from it. Now the government has changed there. We have written to the union power minister and the (state) chief minister. They (Uttar Pradesh government) are saying we will not clear the dues. If the state governments start behaving this way, you can yourself realise the present scenario of selling power,” Dhumal said.

The chief minister of the BJP-ruled state blamed the UPA-led central government for its failure to bring in reform in the power sector.

“Excessive withdrawal of electricity by certain states has led to power grid failure twice. Such states should be punished. If the central government brings reforms in the power sector, then the demand of our electricity will increase and we will be able to earn more income from its selling.”

He said the banks have refused to finance the power distribution companies, which have cumulative losses of Rs.1.50 lakh crore.

“They are not getting the loan. If the distribution companies don’t have funds, they won’t buy power. The central government should give incentives to bail them out,” he said.

Dhumal said with more projects expected to be commissioned in the state in the next few years, “there will be problem when it comes to selling power.”

(IANS)