REL Lines Up Rs 4,065 Cr Capex In Orissa

The three Reliance Energy (REL) controlled power distribution companies (distcos) in Orissa have proposed to spend Rs 4,065.65 crore in the next five years, according to their business plans submitted to the Orissa Electricity Regulatory Commission (OERC) recently.

The three distribution companies are Wesco, Nesco and Southco, whose nomenclature is based on their areas of operation such as western, northern and southern parts of the state.

Of the total outlay, Wesco plans to spend Rs 1,282.05 crore, while the expenses proposed by Nesco and Southco are pegged at Rs 1,509.54 and 1,274.06 crore respectively.

The money will mainly meet the load growth across consumer categories, so as to reduce the losses, increase efficiency and productivity, augment/replace/retrofit old/obsolete/under-rated equipment, meet environmental, safety, regulatory and other statutory requirements, purchase routine tools and equipment and other miscellaneous expenditure of capital nature.

The infrastructure upgradation includes increasing the 33 kV and 11 kV lines to bring down LT/HT line ratio and implementation of HVDS, increasing 33 kV substations to improve voltage levels and extend reach areas, installation of breaker on 33 KV and 11 KV side, DTR metering and consumer indexing to support energy audit, rural electrification works under Rajiv Gandhi Gramin Vidyut Yojana (RGGVY) and automation of processes by IT intervention in technical and commercial areas.

However, during a hearing on the business plan, OERC raised doubts about the management capability of the three distcos to spend the huge proposed amount towards investment over the next five years “as there is no mention about strengthening human resources for executing works of such stupendous magnitude”.

Similarly, the commission has questioned the sourcing of funds. It pointed out that investments linked to loss reduction, system improvement and cost benefit analysis have to be realistically spelt out. “Distcos are not yet able to furnish the actual technical losses as on today. Unless the base line data is accurate, future projections could turn out to be an exercise in futility”, it observed.

The commission has urged distcos to conduct the technical loss study and make future projections accordingly. The commission also enquired why distcos cannot reach 100 per cent collection efficiency after eight long years of managing the distribution sector.

The commission advised the three distribution companies to conduct regular meetings with government departments for resolving the disputed arrears. It has also sought clarification about the government’s investments in the power sector, especially by way of the Rajiv Gandhi and APDRP schemes.