The Novel Coronavirus (COVID-19) pandemic has badly hit the power sector in the State and the situation is precarious.

While revenue generation is going down, working capital bank loans are on rise, leaving both Discoms and Gridco in dire straits.

With lockdown in force, revenue generation by the  Discoms has been hard hit.

While total revenue of four Discoms during 2019-20 was Rs 10,193 crore, revenue from industrial and commercial consumers was expected at Rs 5982 crore. Fixed charges from industry and commercial consumers were pegged at Rs 868 crore.

So, both together were pegged at Rs 6,850 crore. Nearly 70 per cent revenue is expected from industrial and commercial establishments.

With lockdown in force, industrial and commercial establishments are almost closed down and power utilisation has gone down badly.

Over the years, Odisha has developed installed capacity 7,070 MW power, which includes thermal power of 3,067 MW, hydro power of 2,085 MW, renewable power of 637 MW and Central sector power of 1,281 MW.

Out of the installed power capacity, the power available in the State has gone up to 3,285 MW. But the power demand has gone down to 2,405 MW, thanks to the corona crisis.

Industrial and commercial consumers were the major user of power and their demand has gone down drastically due to COVID-19 lockdown. So Odisha has 880 surplus power, which the authorities are surrendering to the Inter State Generation Stations (ISGS).

While revenue generation has gone down, working capital loans on both Gridco and Discoms are on rise.

As on March 31, 2020, the outstanding working capital loan on Gridco and Discoms was at Rs 6,033 crore. The Discoms are also facing problem in receiving the dues from the State Government and its various organisations.

Above all COVID-19 has come as a major blow for the Discoms and power utilities, which are providing 24x7 power supply to consumers.

Take for example, the Discoms are to receive Rs 480 crore from the Government departments. An amount of Rs 1 370 crore is payable to various generating companies like NTPC, OHPC, IPPs by Gridco which procures bulk power for the Discoms.

An amount of Rs 5,374 crore of Gridco is outstanding with various Discoms. Cesu, Nesco, Wesco and Southco owe an amount of Rs 2, 158 crore, Rs 997 crore, Rs 1,217 crore and Rs 1,002 crore respectively. Gridco owes Rs 48 crore to PGCIL.

Different industry associations have been representing to the Chief Minister for several concessions like waiver/ remission/ deferment of minimum charges, fixed charges and electricity duties etc. If any of the demands are met and if the Gridco were to resort to borrowings from financial institutions like REC/ PFC and in view of the falling revenue collection, it may be necessary to consider State subsidy, because passing of any additional burden by way of tariff will be objected by the consumers who are hard pressed otherwise. Even the borrowings will entail Government guarantee.

A judicious mix of market borrowing and State subsidy is required to tide over the situation in the State, states a former Chief Secretary.