CAG finds fault with TSSPDCL financial management

The Comptroller and Auditor General (CAG) report for 2017 has faulted Southern Power Distribution Company of Telangana Ltd (TSSPDCL) on short term power purchases in excess of limits and at rates higher than maximum ceiling limits set by the Electricity Regulatory Commission (ERC) resulting in extra cost of ₹5,821 crore during 2012-17 period.

In its performance audit of the power distribution company, the CAG has also commented on financial management, implementation of schemes, operational performance and other aspects of the utility.

“The delay in filing the Aggregate Revenue Requirement (ARR) for 2016-17 had resulted a revenue loss of about ₹324 crore,” the report said adding that against the requirement of filing ARR 120 days before the commencement of 2016-17 financial year, the old tariff was continued up to June 30, 2016.

Similarly, the company was burdened with excess expenditure of ₹789 crore as it had spent ₹6,633 crore on creation and strengthening of infrastructure as against the regulatory body’s approval of ₹5,843 crore during 2012-17. Although the company has reported continuous reduction in energy losses during the five year period, the losses were higher than the norm fixed by the regulator. As a result, the company was burdened with additional loss of ₹1,307 crore during the period as it could not be recovered by way of tariff, the report stated.

Farm power

As the power supply to agriculture sector has exceeded the limit approved by the ERC for the five year period the utility had to bear additional burden of ₹1,744 crore. Besides, by implementing the directions of the State government to ensure supply of nine hours to farm sector without ensuring funding in advance, the utility was forced to meet ependiture of ₹586 crore from its own funds, the CAG report pointed out.

It also observed that against the Central Electricity Authority specifications, the utility had continued to buy three-star distribution transformers (DTRs) instead of five-star DTRs.

Energy efficiency

“Audit analysis showed that the company could have save 701 to 20,586 units per DTR on various capacities of five-star DTRs and it would have enabled the company to conserve energy worth ₹2,220 crore over the 25 years lifetime of the five-star DTRs,” the report felt.

Further, waiver of penalties coupled with allowing of price variations to vendors had led to unnecessary burden of ₹81 crore, the CAG said in its performance audit report of TSSPDCL.