In what comes as a big success for the Union minister for power, RE, coal and mines, Piyush Goyal (who spent days and months in convincing states to join the Centre’s flagship scheme —- UDAY or Ujwal DISCOM Assurance Yojana for the financial and operational turnaround of state power distribution companies), India has got its first state power distribution company that has been able to eliminate its losses after joining within 10 months of joining UDAY.
The DHBVN or Dakshin Haryana Bijli Vitran Nigam— one of the two state power distribution companies of Haryana that joined the UDAY scheme on March 11, 2016 has not just been able to completely wipe out its losses for the first time but has also posted a profit of Rs 201.35 crore in the first half of the current financial year (2016-17) as against a loss of Rs 479 crore last financial year (2015-16).
Haryana state has two DISCOMs namely UHBVNL and DHBVNL that joined UDAY on11-Mar- 2016. While the state had incurred a loss of Rs 815 cr in 2015-16 for both DISCOMs combined and had given loss projections of Rs. 2911Crs for 2016-17, Rs. 1878 Crs for 2017-18 and Rs. 456 Crs for 2018-19, it is noteworthy that one of the two DISCOMs is back to profits—the first ever since it was created.
Even though minister Piyush Goyal had to spend days and months in convincing some of the 18 states, who have already joined UDAY, the profitable turnaround of Haryana’s DHBVNL will convince those handful of remaining states to come on board and enjoy the benefits of this first of its kind scheme.
As per the projections by the Haryana state, the first ever profit of Rs 80 cr from the state DISCOMS was to come in 2019-20. State officials said the major cause of concern for the State is high ACS (Average Cost of Supply) which is Rs.8.37/unit H1 FY 17 against the National Average of Rs. 6.66/unit. The cost of energy not billed (Energy Lost) for the State is Rs. 1.85/unit indicating high incidence of theft.
With a positive beginning made by one of the two state DISCOMs, the focus is now on the other DISCOM, Uttar Haryana Bijli Vitaran Nigam Ltd., Panchkula (UHBVNL) that still has reported the loss of Rs-1233 cr in the first half of 2016-17 against the loss of Rs. -336 Crs in FY 16 (full year). Officials added that in UHBVNL there is the issue of Lower Billing Efficiency of 67.01%, high AT&C loss of 36.62% and higher GAP of Rs. 1.67/unit (on Energy Sold Basis).
The ATC loss for the State stood at 29.75% in first half of 2016-17 with an annual target of 24.02% in 2016-17 i.e. a slippage of 24%. The slippage is mainly on the part of UHBVNL which has slipped from 34.16% in FY 16 to 36.62% in H1 FY 17 against the yearly target of 25.94%. So UHBVNL has to improve by at least 41% of AT&C loss reduction from the existing achievement which is a big task ahead.
On the other hand, DHBVNL has made an AT&C loss achievement of 24.09% (H1 FY 17) against the yearly target of 22.48% (MoU) which shows that there is a slippage of 7%. DHBVNL targets are soft comparatively and they should try to achieve more in case of AT&C Loss reduction.
Hence while one of the DISCOM, DHBVNL is moving on the path of turnaround which is appreciable, the other DISCOM, UHBVNL needs to catch up fast to ensure that UDAY targets are met within agreed time lines. Nonetheless the achievement of DHBVNL is a clear indication of the success that can be achieved under the scheme thereby helping the state power companies come out from the financial mess that they have been facing over the years.