Maha Transco eyes speedier clearances

A power transmission company seldom makes news. It’s not as ‘alluring’ as power generation or even power distribution companies. But ever since power generation, transmission, and distribution got unbundled, thanks to the provisions of the New Electricity Act of 2003, transmission has begun to gain stature.

Nevertheless, they remains less attractive because their topline is significantly smaller than that of power generation or distribution companies, despite having huge asset bases. The tariffs they get for wheeling power from generation companies to distribution companies is invariably fixed by the power regulator.

That could explain why Maharashtra State Electricity Transmission Company (MSETCL) has seldom been in the news, notwithstanding the fact that it is the largest among state owned transmission companies. And unlike many other state transmission companies, MSETCL has been profitable, and has continued to grow.

To understand its working and some of the plans MSETCL has, dna’s R N Bhaskar spoke with Arvind Singh, MSETCL’s managing director, a post he has held since 2009. A graduate in economics from St Stephen’s College and the Delhi School of Economics, he was earlier assistant collector at Aurangabad in Maharashtra, chief executive officer of Aurangabad Zila Parishad and chief executive officer of Nagpur Zila Parishad, among his other postings. He was also deputy secretary at the ministry of commerce and industry and director (pharmaceuticals industry) in the ministry of chemicals and fertilizers. Given below are edited excerpts.

How does your business run?
Our main job is to carry bulk power from generating stations – be they large government-owned power generating companies, or independent power producers (IPPs) or even small bagasse-based power generation units – to distribution companies The tariff that I should charge distribution companies is decided by the state power regulator. In Maharashtra, this means MERC (Maharashtra Electricity Regulatory Commission). In this state, the major distribution companies are currently MSEDCL (the state-owned Maharashtra State Electricity Distribution Company Ltd), Tata Power, Reliance Energy and BEST. MERC allows us a share of 26 paise per unit, and we learn to manage our operations and service our capex accordingly. By and large, we have had no problem in getting the money owed to us.

Is this happy state of good recovery of funds true of all state owned transmission companies?
Most of them, yes.

If the state government offers largesse of free power and does not collect money from power customers, will transmission companies also get into trouble?
Logically, yes. This is because the money that is paid to us has to be collected from the users of power. If this money is not collected, then they will find difficulty in paying transmission companies as well. Fortunately, that has never happened in Maharashtra.

Your transmission losses?
Please remember that unlike distribution companies’ losses, our losses are usually technical in nature. These losses depend on the quality of the transmission grids, the kind of power that is being wheeled, and also the distance. For instance, power wheeled at higher voltages will see lower losses than power wheeled at lower voltages. But to wheel power at higher voltages, you need a better quality grid which also needs to be managed well.

The limit set by MERC for transmission losses is 4.8%. We used to suffer losses of around 5%, but through upgradation of the grid and better management, have brought it down to 4.2%. In fact, because of our efficiency, we have been awarded incentive bonuses for the last few years by the regulator.
But do bear in mind that many of these losses are because of legacy systems. We had old 66 KV, 100 KV 110 KV transmission networks which need to be replaced. Much of the Vidarbha region in Maharashtra still runs on 66KV networks, and this accounts for around 10% of my 41,390 ckt Km (circuit kilometre) of transmission lines.

At the upper end, we have 500 KV HVDC (high voltage direct current) transmission grids (more details can be found at http://www.mahatransco.in/wps/wcm/connect/msetcl/menu/transmission+network/network+at+glance/current+infrastructure#.Ul-moVP-CBM).

What are the factors that determine efficiency in your business?
Besides the quality of network itself, we need excellent HR, finance, project management and maintenance stores teams to make this business effective. We are also beginning to work with new power generators – like the Jindals, Adani Power and Indiabulls.

The biggest challenge you face?
It is in the area of project execution. We need forest and environment clearances.