In a recent interview with Power Line, Sanjeev Hans, Principal Secretary, Energy, Government of Bihar, discussed the key achievements of Bihar’s power sector in the past few years. He also highlighted the new initiatives and measures being taken in the power distribution segment, particularly with regard to revenue management, as well as the state’s targets and plans for renewable energy development. Edited excerpts…
What is your perspective on the current state of the power sector in Bihar?
In Bihar, 100 per cent household electrification has been achieved, and electricity demand in the state has been growing. To tackle the task at hand, we are focusing on both technical and commercial loss reduction as well as network and system modernisation. With the availability of the latest IT tools, we are upgrading and modernising our micro-level monitoring system and enhancing our control over the distribution network. We are also undertaking energy accounting and auditing, which has not been done till now.
In the power generation segment, in line with the central government’s targets, we are focusing on increasing the share of renewable energy in our energy mix. Meanwhile, transmission infrastructure is being developed to cater to the additional generation capacity, especially renewable energy capacity. While we are looking at all the aspects of the value chain, the consumer is at the centre of everything. We are focusing on enhancing consumer satisfaction with quality and round-the-clock power supply.
How has been the performance of power discoms in the state in the past few years?
In the last decade, significant distribution infrastructure has been completed under the Deendayal Upadhyaya Grameen Jyoti Yojana and the Integrated Power Development Scheme. The development of power distribution infrastructure for the agriculture segment was started late. However, under the RDSS, we have proposed to complete the remaining work for the segment.
On the operational front, we have been able to achieve nearly 24 hours of power supply in urban areas. The average hours of supply in rural areas is also more than 22 hours in a day, higher than the national average.
With regard to financial parameters, there has been a gradual decrease in the aggregate technical and commercial (AT&C) losses over the years. A decade back, the AT&C losses in the state were 45-47 per cent, which have reduced significantly, with 29.27 per cent losses recorded in 2021-22. Although our losses are on the higher side, we have definitely reduced them at a fast pace given the typical and skewed consumer and energy sales mix in the state.
We are focusing on making the discoms financially viable through increased revenue collection, reduction in power purchase costs and better financial management. With regard to revenue collection from consumers, Bihar’s discoms have clocked a 23 per cent (Rs 2,512 crore) increase over last fiscal. Taking into account the revenue from the sale of available extra power, a total of Rs 17,326 crore has been recovered, which is a substantial growth of 35 per cent year on year. In short, we have been able to recover 66 per cent of our power purchase cost in FY2022-23, which is a significant 5 per cent hike from FY2021-22.
We have implemented optical character reader technology, resulting in fewer faults in bill generation and increased billing and collection efficiency. The government dues were reduced to almost zero for FY2022-23.
What are the recent initiatives/steps taken for revenue management by discoms?
BSPHCL has created a dedicated Revenue Monitoring Cell (RMC) with the objective of handholding and supporting the discoms in better revenue management. This RMC is personally monitored by CMD, BSPHCL. For revenue management, we are working on the entire power cycle starting from optimising the power procurement cost to enhancing operational and management efficiencies on the power distribution side and ensuring timely and accurate billing for consumers.
On the input cost front, we are working on reducing our average power procurement cost. Bihar has one of the highest power procurement costs in the country and last year, our average power procurement cost was Rs 5.14 per unit, as against the national average of Rs 4.68 per unit. We are also exploring solutions to reduce the cost of power. On the fixed cost front, there are some legacy issues because the long-term PPAs do not have a suitable exit clause. We are trying to work our way through these challenges and exploring solutions to reduce our input cost, such as availing of incentives or rebates to discoms for making timely payment to gencos, providing an exit clause for end-of-life PPAs, and procuring power at cheaper rates from power exchanges. Another important aspect of revenue management is smart prepaid metering. We have already covered more than 1.3 million urban consumers with prepaid smart meters, which is the highest in the country. We aim to cover all 1.8 crore+ consumers with prepaid smart meters in the next two to three years. Smart prepaid meters provide consumers with information about their electricity consumption and the corresponding charges that are deducted. For consumers using prepaid meters, billing and collection is over 100 per cent as we receive advance payments. As the discoms become more relaxed on the cash flow side, they can make timely payments to gencos for power purchase and can avail of the various rebates available.
We have devised an interactive and bottom-up approach to set revenue targets for our field teams. Earlier, the targets were devolved centrally and assigned to the field units. However, now the field staff actively participate and develop an annual operations plan using IT systems and MIS platforms. Apart from this, distribution companies of Bihar have set up a Special Task Force (STF) cell to monitor the disposal of different complaints related to electricity theft in urban as well as rural areas. In addition to this, the STF cell has conducted surprise visits/inspections to address complaints received related to collection or malpractices cases. Complaints within the purview of SOP and supply code are being dealt with at the discom level.
What are the steps being taken to promote renewable energy development and management in the state?
There are a few typical features of renewable energy development in Bihar. The state falls on the same latitudinal belt as Gujarat and Rajasthan, which record significant renewable energy generation. However, Bihar has one of the highest population densities in the country, resulting in the scarcity of land in the state. Whatever land is available, it is either very fertile and entirely under cultivation or it is waterlogged. There is only a small area along the border area of Jharkhand, namely Chota Nagpur Plateau, where solar power generation is feasible.
We have planned the development of around 1 GW of renewable energy in the coming years. The state is implementing the Jal Jeevan Hariyali Mission, wherein all government buildings will have grid-connected rooftop solar plants. Under this, we plan to add 150-200 MW of solar power, of which 20 MW has been commissioned and work orders have been issued for 65 MW. We have also successfully completed a 1.5 MW floating solar power plant and are looking into developing more floating solar projects. Apart from this, we have acquired a few parcels of land for the development of nearly 450 MW of ground-mounted solar power plants. Further, the Bihar Renewable Energy Development Agency (BREDA) has signed a power purchase agreement for the procurement of 250 MW of renewable energy, of which 200 MW is expected this year itself. In terms of the renewable purchase obligation, we have secured renewable energy from outside the state. We have tied up for the procurement of 210 MW of 24×7 renewable energy from SECI through a hybrid solar and pumped storage hydro plant project. During the day time, solar power will be supplied and energy storage will be utilised in the evening. In addition, around 54 MW of power in the state is generated through small and mini hydropower plants.
What are the biggest issues and challenges the state is facing and how are these being addressed?
One of the immediate challenges is to stop leakages on the power distribution side. These are primarily technical in nature, and we hope to tackle these under the RDSS. We have identified the high loss-making feeders and are working on replacing the conductors with aerial bunch cables and decreasing the length of the long feeders to curtail losses. We are undertaking energy accounting by using the available IT tools. Another challenge is to complete the power cycle by establishing a structure to capture the entire power cycle, from the power purchase stage to the recovery from the consumer. With prepaid smart meters, DT meters and system metering as well as energy accounting and energy auditing, we will be able to complete the power cycle. Another challenge is to increase the renewable energy generation in the state. For this, we have planned 1,000 MW of renewable energy in the state and are also exploring tie-ups for renewable power from outside the state. Apart from this, we are working to address the legacy issues of long-term PPAs.
What is your outlook for the power sector? What are your top priorities for Bihar’s power sector?
In the distribution segment, the power ministry’s scheme, RDSS, is performance linked and encompasses an evaluation framework covering operational and financial parameters, corporate governance, and consumer satisfaction. We are on the right trajectory with regard to our commitments under the RDSS. In fact, we are one year ahead of our AT&C loss reduction targets. On the renewable energy front, we are working to ensure that we have ample green energy and contribute to the national goals. In the transmission sector, we are geared up to meet the future demand.