The 21st November local dailies has carried a news item under the caption “Govt. apathy throws Power Deptt into crises” which is not only alarming but in no uncertain term speaking of eminent collapse of power sector in the state. The Association of Power Engineers Nagaland (APEN) has described in details the ground realities where the entire Power Department is held under tender hook only counting times to be snapped out of the hook and fall to oblivion. When we cannot wait patiently even for an hour load shedding, we can well imagine the chaotic scenario of complete shutdown of power supply in the State. Unlike many Associations which give ultimatum to the Government, the APEN has displayed great wisdom and matured statesmanlike attitude and warned the eminent collapse of the Power Sector if the Govt. do not mean business.
When we all go along with the DoP imploring the State Govt. for immediate redress of the problem, the DoP and the APEN should have exerted hard pressure on the State Govt. for bringing out a permanent solution to the Power Sector through the process of unbundling and Corporatization of the power sector. The DoP shall be on and off nagging with the same problem as long as it functions as a Department of the State Government as the service sector like Power and Public Transport cannot effectively and efficiently functioned going through the Govt. red tape mechanism.
For the purpose of reforming and restructuring of the Department, the DoP have engaged the International Management Institute, New Delhi for a thorough evaluation and comprehensive study of the DoP and to submit their expert finding in the form of recommendation for action to be taken by the Department. The IMI submitted their final report on March 2006 where they recommended a Road Map for Reform and Restructuring the department. It reads; “It is recommended that the GoN follow functional unbundling and Corporatization without any further delay.
Establishment of a STU (under the Electricity Act, 2003) and another Corporate entity for generation/ distribution/trading of electricity is found to be more suitable option and, hence, recommended. The STU may be named as “Nagaland Power Transmission Corporation Limited”, while the generation and distribution company may be named as “Nagaland Power development and Supply Corporation Limited”. They also recommended setting up a Rural Electricity Board, the State Electricity Regulatory Commission and Rationalization of tariffs and state subsidy. They have also made elaborate plan for the STU and Financial Restructuring, NPDSCL and Financial Restructuring towards autonomous functioning of the corporatized entity.
In a separate case study on “Unshackling the market forces in the Electricity”, Amit Kapur of J. Sagar Associates writes, “It is trite that the electricity industry comprises of sub-sector which are distinct functions, being, generation, transmission, distribution, trading and supply. These sub-sections are distinct in terms of the operation, Commercial, investment and Consumer- interface aspects. A pragmatic market design must be structured around the contestability and potential for competition in these sub-sectors while balancing the regulatory-market compact”. Altogether ten precious years has elapsed after the submission of the final report by the IMI for restructuring of the DoP but the State Govt. till date have done nothing on the recommendation except establishment of the Nagaland Electricity Regulatory Commission (NERC) which is functioning for revising the annual power tariff only and could not function more as Standard Operational Procedure (SOP) cannot be implemented under the present circumstances.
The need of the hour for the Department of Power in the state to carve a permanent solution is unbundling and corporatization as recommended by the IMI study. There has to be not only strong political well but there has to be equally wellness from the APEN for corporatization of the DoP towards which the APEN should be not only soliciting but strongly prodding the State Government to legislate without wasting any more time. The IMI recommendation further writes, “Experience suggests that successful implementation of reform process requires, inter alia, broader understanding and acceptability of, and commitment to, reform agenda and process among the various stakeholders” Looking at the present power scenario in the State, the peak demand of power is 145 MW only with main source of 90% from Central Sector Power Allocation and only 10% (14.5MW) from the State own generation. Here 90% of the power requirement has to be purchased from Central Sector Power allocation at the whooping cost of Rs. 200 Cr. during the year 2014-15. However, the total revenue collected from the sale of the 90% purchased and 10% own generation was only Rs. 91.86 Cr. causing a massive lost of 67% (Rs. 108.14 Cr), the highest in the Country. This amply speaks that all is not well in the Department.
If we look at the system of power tariffs, you are charged higher and higher rate if you consume power more than 30, 31-100, 101- 250 , 250 >kwh. When queried the logic and reason for such hike, I was told by the Department official that the system is adapted in order to discourage consumption of more/higher energy. What a contrasting approach from developed countries as the country’s development is measured in terms of per capita consumption of electricity which in turn depends on electricity generated. In India per capita energy consumption is quite low and for the year 2007 it was only meager 665 kwh per annum in comparison to about 12000 kwh for USA and 34000 in Norway which indicates fairly low level of industrialization in the country.
The study has also criticized the DoP concerning in-house capability taking example of the Likimro Hydro Project. Apart from uneconomical cost of generation, there are other issues facing the power department. At present, the engineers and staff posted to Likimro plant are stationed at the CE office at Kohima. It appears that the plant side does not have basic infrastructure and facilities to enable the engineers and staff to live there. If the engineers and staffs are not going to be stationed at the plant site, it is not clear who else would operate the plant. This is an issue that DoP has not yet addressed.
Capacity building for operation and maintenance of hydro plant like Likimro is another issue that deserves attention. The Likimro engineers need to undergo technical training on operation and maintenance of the plant. The IMI recommendation also goes against the propose Thermal Plant (based on diesel engine) of 4x5.73 MW at Dimapur as the economy of thermal power from liquid fuel based station is questionable since fuel price is susceptible to regular hikes in international oil prices. The cost of generation of power from the proposed project is therefore, bound to be much higher than what is being initially contemplated.
The IMI prefer and recommends the 3 x 40 MW Dikhu multipurpose a major project now under consideration of the DoP, the DPR of which was with the Central Electricity Authority for clearance and was also under active consideration of Nagaland Pollution Control Board for environmental clearance then. The recommendation states that there is a big advantage of building relatively large-scale project such as 120 MW Dikhu multipurpose projects. Right from project construction through operation and maintenance, a bigger project would provide better opportunity for career progression to the civil, mechanical and electrical engineers of DoP, who have been for long facing career stagnation. Going by the experience of Likimro hydro project, DoP lacks adequate in-house expertise to operate and maintain power-generating stations. Thus there is a need for building in-house capacity to operate and maintain power stations that can be dove tailed with this major project.
The acceptance and implementation of the recommendations of the IMI is the only permanent solution available to the State Govt. for reformation of the power sector in the state and have our own generation of power suffice for the state. But unless and until a strong political well is dispensed and go for unbundling and corporatize the DoP, we will continue to face power problem in the state. The state should wake up before the power sector collapse to our woe.
T. Meren Paul
Member, State Advisory Committee (NERC) Kohima.
