Wednesday, August 27, 2008

Agricultural Consumption in Power Sector of Haryana

HSEB found it increasingly difficult to meet the demand and provide adequate
supply of electricity: by 1997, the state witnessed a peak shortage of 11% and energy
deficit of 25%. No generation capacity had been added within Haryana after 1990 and
the State became increasingly dependent on imported power. However, the
transmission system reportedly deteriorated over the years because of lack of adequate funds for expansion and rehabilitation and poor operational efficiencies.

The transformer failure rates were high due to overloading, the quality of power supply was poor and the non-technical losses were excessive.Financially, the HSEB was incurring huge losses. As of 31st March 1998, the accumulated financial loss had reached Rs. 16079.7 million and continued to grow due to non-remunerative tariffs, high technical and non-technical losses and poor revenue collection. HSEB’s poor financial health affected such basic functions as system maintenance, expansion and rehabilitation and led to large outstanding current liabilities.

At the same time the phenomenal growth in agriculture consumption is also a area of concern for HSEB as agricultural consumption was subsidized. The phenomenal growth is demonstrated by the growth in the number of electric pumps-sets/tube-wells. On March 31, 1970 the number of electric-operated tube-wells was 68,226. Within a decade this number rose to 204,340, representing a 300% growth in ten years. The number of agricultural connections grew further to 0.35 million by the early 1990s. Agricultural connected load has followed the same pattern of growth, registering an average increase of 8% per year between 1970 and 1990. Such a growth in the agricultural load is the result of a deliberate policy to promote agricultural production in the state through green revolution. It is interesting to note that between 1970 and 1990 the average pump size per connection, calculated from the connected load and the number of connections in a year, remained practically constant at about 4.7 kW per connection. Since then, the average connected load has increased continuously, reaching 5.8 kW per pump in March 2000.

Consequently, the electricity consumption increased from 1328 MU in 1982-83 to
2543 MU in 1989-90 and further to 4570 MU in 1999-2000.There are at least four main reasons for such a significant rise in the average estimated consumption per connection:

1) First, the number of unmetered connections has increased. At present, only about
20% of the agricultural connections have meters and even some of these meters are
defective. Consumption of unmetered connections and connections with defective
meters is estimated by the utility and it is a matter of debate whether the estimated
agricultural consumption is overstated.

2) Second, in absence of a meter, the consumer has the freedom to consume as much
power as he wishes and it is likely that he would consume much more than his metered
counterpart. The tariff differential between a metered connection and a flat rate
connection is such that a flat-rate connection becomes economically rational for a
consumer if he can consume much more power than a metered connection.

3) Third, the data on connected load may be inaccurate depending on whether or not
the records are updated by the utility. It is generally believed that flat rate consumers increase their pump size without declaring the higher pump rating, because their charges increase proportionately with the pump rating.

4)Fourth, irrigation requirement increases with need to increase in agricultural
production and area under irrigation. It can also increase as the ground water level falls.

All these factors could have influenced the electricity consumption in Haryana.

Unless meters are installed, the true consumption is difficult to establish.

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