By Nageshwar Patnaik in Bhubaneswar, February 1, 2015 :

Even as officials hail the CESU model as unique in power distribution sector, a close scrutiny of its performances over the years smack of their false claims.

Cesu’s inefficiency in managing its affairs is evident by the fact that it is the biggest defaulter to Gridco despite lower Bulk Supply Tariff [BST] set by the regulatory body, Odisha Electricity Regulatory commission [OERC] by  31 paise, 59 paise and 43 paise per unit in previous three years, compared to three other Distribution Companies [Discoms]. In the current year, CESU’s BST is 15 paise less than the other three Discoms.

Cesu owes Rs 1766 crore to Gridco at the end of Financial Year 2014 while three Reliance Infra managed Discoms put together have an outstanding arrear of Rs 2076 crore as per the OERC’s BST order on March 22, 2014.

                                           Source: OERC BST order for Gridco, 22.3.2014

Even the franchise model, which OERC and CESU claimed to be unique, is just crumbling. In November last year, energy department officials on the basis of OERC report, gave a presentation before chief secretary, G C Pati hailing franchise model as the ideal model to carry forward reforms in power sector.

But in the first six months of current year, CESU’s Aggregate Technical and Commercial [ATC] losses have gone up from 39.50% to 40.33% despite engaging franchisees to improve billing, collection and voltage improvement as per the recent Aggregated Revenue Requirement [ARR] & Tariff Application filed by CESU before the OERC.

Even the bill collection of CESU has come down from 97% in 2011-12 to 85.54% in the current year, as submitted by CESU to OERC in its ARR application. Barring Balugaon, Puri, Nayagarh, Marshaghai and Jagatsinghpur areas, ATC loss has not come down as per the target. Rather in as many as six areas the ATC losses have gone up. Notably the average ATC loss of most of franchisee areas still remain as high as 65% or more.

Cesu’s approach of having cake and eat it too has irked the franchisees so much so that some of them are seriously contemplating either to quit or take CESU to the High Court for violating terms and conditions in the agreements they have entered into.

“We never expected Cesu to deal with us in a partisan matter. For instance, Cesu got the arrears from the government departments, but did not pass on to us though there is a provision about it in the agreement. There are several such instances of one-upmanship by Cesu. Unless Cesu becomes a professional body, the very purpose of franchise model to improve distribution sector will remain a distant dream”, an official of a franchisee said.

The matter does not end there as Cesu now wants to pass on its rising cost due to mismanagement to the consumers if the revised ARR it filed before the OERC last month is any indication.

In its revised ARR and Tariff Application filed by Cesu for Wheeling and Supply of electricity in its area, as sought by OERC, Cesu has proposed to provide revenue for wheeling on its total energy input to high tension [HT] and Low Tension [LT] sector, inclusive of losses at 85 paise per unit and accordingly has sought steep rise in tariff. CESU has proposed Rs 100 per month towards Kutir Jyoti (Below Poverty Line) consumers and Rs 3/- per unit per month for first slab (0-50 units) of domestic category consumers as against existing Rs 62 and Rs 2.30 respectively.

The other three Discoms, however, have not specifically sought any hike category wise and have left the OERC to decide about tariff.