JERC | Public Hearing | South Goa | Live | Prudent | 060226

Audit and Financial Presentation Overview

Introduction to the Audit Process

The department conducts an audit post-financial year, submitting audited figures for commission scrutiny. Uncontrolled expenses are allowed to be passed on in time.

The presentation aims to reconcile approved figures with audited ones for financial year 2024-25, as per Regulation 2021. This is part of petition number 163 bar 2026.

Power Supply Scenario in Goa

Goa relies heavily on central allocations (80-85%) from NTPC and NPCI, with minimal contributions from captive power plants (1-2%). Renewable energy sources account for about 30-33%.

All power is imported through interstate lines, making reliability a challenge due to the absence of local generation facilities. Total consumers for FY 2024-25 are projected at 7.23 lakhs, with peak demand recorded at 815 megawatts in March 2025.

Renewable Energy Initiatives

Climate change obligations require Goa to fulfill around 33% renewable energy commitments through various sources including solar and wind energy contracts totaling approximately 81 megawatts and additional agreements for hydroelectric power.

Specific long-term contracts include arrangements with Solar Energy Corporation of India and other entities for a total of up to 150 megawatts combining wind, solar, and battery storage systems.

Financial Breakdown of Power Costs

A significant portion (80-85%) of costs passed through tariffs is attributed to power purchase costs from central sector stations like NTPC and NPCI; actual expenditures exceeded approved amounts significantly this fiscal year.

The total expenditure approved was ₹2081.55 crores against a sales volume of approximately 5,450 billion units, highlighting the financial dynamics involved in energy distribution within Goa's regulatory framework.

Power Purchase Cost and Renewable Obligations

Overview of Approved Figures

The total power purchase cost approved by the CHE is 2,557.91 crores for an energy consumption of 5,583.44 million units, reflecting India's renewable obligation to meet 50% power generation by 2030.

Cumulative Targets and Achievements

For the year 2024-25, a cumulative target of 1502.19 million units was set; actual achievement was around 1645.57 million units, exceeding the target by 143.37 million units. This indicates successful fulfillment of obligations for the period from 2020 to 2025.

Energy Balance and Distribution Losses

In Goa for the year 2024-25, total sales were recorded at 4860.87 million units with a distribution loss of 7.95%. The net energy requirement at Goa's periphery was calculated at 5151.52 million units after accounting for interstate line losses and approved losses of approximately 4%.

Capital Expenditure Insights

Financial Submissions

The Lexis Department submitted capital expenditure figures amounting to €567.25 million with capitalization at €917.25 million for planned projects in that financial year, emphasizing project completion criteria based on distance laid versus planned kilometers.

Capitalization Challenges

Projects not fully commissioned (e.g., if only part of a project is completed) cannot be fully capitalized; thus, only costs incurred up to operational status are recognized as capital expenditure (90% shown). Actual capital expenditure reported was €1415.17 million with a capitalization rate of about 48%.

Public Perception and Infrastructure Development

Addressing Public Concerns

Clarification provided regarding public concerns over high expenditures amidst political scrutiny; emphasizes that infrastructure investments are crucial for reliable electricity supply which impacts daily life significantly across various sectors including health and education.

Importance of Electricity Reliability

Acknowledges that disruptions in electricity can severely affect quality of life; highlights increased demand from citizens who rely heavily on consistent power supply for both personal and professional needs, especially in urban areas where outages are intolerable even for short durations.

Future Infrastructure Needs

Ongoing Improvements Required

Despite improvements noted in reliability due to recent infrastructure investments (like underground cabling), there remains significant scope for further enhancements to meet growing demands effectively while ensuring quality service delivery across all sectors reliant on electricity supply such as agriculture and industry.

Budget Compliance

All expenditures have remained within state government budget limits while addressing infrastructural needs driven by increasing load requirements; this strategic approach aims to enhance overall service reliability without exceeding fiscal constraints imposed by regulatory bodies or public expectations.

Annual Revenue Requirement Breakdown

Components of Revenue Requirement

Discusses various components necessary for sustaining electricity business operations:

Power purchase costs,

Operation & maintenance expenses (including employee salaries),

Administrative costs,

Depreciation related to past capital expenditures.

This comprehensive breakdown underscores the complexity involved in maintaining efficient electricity services while adhering to regulatory frameworks.

Overview of Working Capital and Regulatory Framework

Importance of Working Capital

Working capital is essential for running a business, as mandated by regulations and acts.

Return on Investment (ROI) cannot be requested by distribution companies due to regulatory caps and standards.

Financial Components

The approved Annual Revenue Requirement (ARR) was 2763.93 crores, with actual expenses being questioned due to prior approvals made a year in advance.

Fuel and power purchase cost adjustments are necessary due to insufficient coal resources, impacting future generations.

Cost Dynamics in Power Purchase

Coal Procurement Challenges

Increased costs arise from importing coal, influenced by quality and associated taxes.

Total net ARR after auditing was reported at 3151.91 crores, highlighting discrepancies between expected income and actual expenses.

Revenue Gaps

A significant revenue gap of 181.70% emerged when comparing actual expenditures against consumer contributions.

Fluctuations in power purchase costs are attributed to dynamic market conditions and increased demand during peak hours.

Government Support and Stakeholder Engagement

State Budgetary Support

The government of Goa has provided budgetary support to absorb the revenue gap resulting from increased power costs.

Stakeholder Consultation Initiation

The speaker invites questions for clarification regarding the financial presentation, indicating an open dialogue with stakeholders.

Industry Perspectives on Renewable Energy

Historical Context of Power Supply

An industry representative discusses the evolution of power supply in Goa since the 1990s, emphasizing reliance on government-supplied electricity.

Suggestions for Renewable Energy Implementation

The representative advocates for rooftop solar schemes but highlights space limitations within industrial areas as a barrier to self-generation.

Captive Power Considerations

There is a call for policies allowing captive power generation where manufacturing plants can offset energy use from solar installations located elsewhere.

Clarifications on Policy Implementation

Addressing Concerns about Solar Plant Installations

Discussion arises around existing arrangements that allow companies to install solar plants off-site while benefiting their operations directly.

Discussion on Power Consumption and Infrastructure Improvements

Stakeholder Insights on Power Consumption

The speaker discusses the possibility of individual stakeholders consuming their stake outside of formal premises, indicating flexibility in discussions about equity.

Dixon expresses gratitude for improvements made since his tenure, particularly regarding issues with lighting and infrastructure related to power supply.

Recommendations for Infrastructure Enhancements

Emphasizes the need for substations to have repair facilities within each constituency to avoid delays caused by borrowing equipment.

Suggests proactive tree maintenance to prevent dangerous branches from falling, advocating for timely interventions rather than waiting for external parties like Mansoor.

Safety Measures and Consumer Awareness

Proposes that uniforms worn by workers should have reflective materials to enhance visibility during nighttime operations or emergencies.

Highlights the lack of consumer awareness regarding overload charges, suggesting a need for educational outreach in villages to facilitate smoother transitions without penalties.

Economic Impact on Consumers

Discusses how sudden increases in electricity bills disproportionately affect low-income households compared to middle-class consumers who may not notice as much difference.

Advocates for a community-based approach where information is disseminated effectively at the village level rather than through impersonal checks.

Power Supply Overview and Challenges

Current Power Supply Status

The department presents an overview of expenditures and invites comments from stakeholders regarding financial allocations for the upcoming fiscal year 2024–25.

Discussion includes details about Goa's power supply sources, including central allocations and renewable energy contributions from various plants.

Grid Reliability Issues

Notes that Goa relies heavily on interstate lines from Maharashtra, Gujarat, and Telangana, raising concerns about reliability due to dependence on external grids.

Renewable Energy Initiatives

Outlines Goa's commitments towards solar energy initiatives with specific agreements aimed at increasing renewable capacity over time.

Mentions ongoing projects involving solar energy storage systems as part of efforts to enhance sustainability in power generation.

Financial Overview and Energy Distribution Insights

Overview of Expenses and Compliance

The expenses related to operations, maintenance (O&M), and employee costs have been calculated in accordance with regulations, specifically clause 12.1A, with figures approved by the commission and audited.

Energy Distribution Categories

The distribution of energy is categorized into three major sectors: industry (largest share), domestic, and commercial. This categorization is crucial for understanding tariff implications.

Power Purchase Obligations

The total power purchase cost for the year has been approved at ₹2557.91 crores against a renewable obligation of 29.91%, indicating compliance with government mandates.

Financial Year Energy Balance

For the financial year, Goa's total sales were reported alongside a distribution loss of 7.95%. This highlights efficiency challenges within the energy sector.

Capital Expenditure Insights

A significant capital expenditure was noted for infrastructure projects aimed at improving electricity reliability, including underground cabling and substations to meet increasing load demands.

Infrastructure Development Challenges

Importance of Infrastructure Investment

There are ongoing discussions about infrastructure investments being critical for maintaining reliable electricity supply; disruptions can significantly impact various sectors including health and agriculture.

Clarification on Media Misinterpretation

Concerns were raised regarding media misrepresentation of investment levels in infrastructure; clarifications emphasized that substantial expenditures have indeed been made to enhance service reliability.

Revenue Requirements and Cost Management

Breakdown of Annual Revenue Requirement (ARR)

The ARR includes costs associated with power purchase, maintenance, administrative expenses, depreciation, interest on finance charges—all essential components regulated by law.

Addressing Consumer Concerns on Costs

Questions from consumers regarding power purchase costs reveal that approximately 80% is approved by the commission; however, fluctuations in coal availability affect pricing strategies.

Future Projections and Stakeholder Engagement

Anticipated Revenue Gaps

A revenue gap was identified due to increased demand during peak hours; this necessitates budgetary support from the state to ensure stability in electricity provision despite market fluctuations.

Stakeholder Feedback Session

Following the presentation, stakeholders expressed concerns about renewable energy targets and operational challenges faced by manufacturing plants in Goa due to space constraints for energy generation initiatives.

Discussion on Power Supply and Infrastructure Issues

Concerns Regarding Manufacturing and Power Plants

Discussion about the need for manufacturing plants in Goa, emphasizing the importance of captive power generation to address existing concerns.

Mention of subsidies available for solar plant installations, highlighting that individuals can set up solar plants for personal use under certain provisions.

Infrastructure Challenges and Improvements

Acknowledgment of past issues with power supply lines, particularly during monsoon seasons, indicating improvements have been made but challenges remain.

Emphasis on the necessity for regular maintenance of substations to prevent dangerous situations caused by overgrown trees and branches.

Consumer Transition and Awareness

Discussion on consumer behavior regarding electrical appliances, stressing the need for a smooth transition in billing practices to avoid agitation among low-income consumers.

Suggestion that adequate time should be given to consumers during transitions to new billing systems, ensuring understanding and compliance without causing distress.

Comparisons with Other Regions

Reference to better infrastructure practices observed in Maharashtra where power lines are maintained more effectively compared to Goa's current situation.

Noted that proper spacing between power lines reduces risks from falling branches or other hazards, suggesting this as a model for improvement in Goa.

Local Engagement and Suggestions

Call for local representatives to engage more actively with community suggestions regarding power supply issues; acknowledgment of their role in facilitating improvements.

Highlighting the importance of local awareness programs aimed at educating residents about safe electricity usage within specified limits.

Implementation Challenges

Urging local government bodies to take action based on community feedback; emphasis on involving familiar electricians who understand local needs better.

Recognition of political figures' efforts in addressing these issues while encouraging further dialogue between officials and citizens for effective solutions.

Summary of Key Points Raised

Acknowledgment of ongoing challenges related to underground cabling projects; call for improved management and oversight in these initiatives.

Infrastructure and Communication Challenges

Disruption in Communication Systems

The speaker discusses the disruption caused by telephone lines, emphasizing the need for better management of overhead cabling to prevent accidents with passing vehicles.

Concerns Over Petroleum Pipelines

There is a growing concern among citizens regarding the safety of underground petroleum pipelines, highlighting public anxiety about potential hazards.

Infrastructure Project Updates

The speaker notes that while there are numerous infrastructure projects underway in Goa, progress has been slower than expected due to various constraints.

Electrical System Reliability Issues

Fluctuations in electrical supply are attributed to broken insulators and wires, leading to significant losses as many households rely on electronic gadgets.

Fault Isolation and Equipment Design

Emphasis is placed on the importance of properly designed equipment that can isolate faults quickly; MCB (Miniature Circuit Breaker) should effectively cut off power during faults to protect devices.

Street Lighting and Billing Concerns

Street Light Billing Inequities

The speaker expresses concern over street lighting billing practices, noting that poorer communities often do not receive adequate service despite paying for it.

Coordination Among Contractors

A lack of coordination between contractors working on different utilities leads to inefficiencies; improvements are needed for better project execution over several years.

Automatic Shut-off Mechanisms

Discussion around automatic shut-off mechanisms for street lights indicates failures in implementation, requiring manual intervention from representatives when systems malfunction.

Billing Systems and Metering Issues

New Three-Layer Billing System

Introduction of a new three-layer billing system has resulted in higher charges for consumers; clarity is needed regarding how this affects residential billing practices.

Replacement of Street Light Poles

Questions arise about the replacement process for single-arm poles used in street lighting; concerns about whether these replacements are necessary or effective persist among residents.

Smart Meter Implementation Challenges

Issues with smart meter installations include difficulties accessing meters located within private premises, complicating accurate billing processes.

Time-of-Day Tariffs Explained

Changes in Time-of-Day Tariffs

The time-of-day tariff structure has shifted significantly, affecting peak usage rates; consumers now face different pricing based on revised peak hours which may impact their electricity costs.

Power Consumption and Metering Challenges

Incentives for Off-Peak Power Usage

The arrangement allows consumers to benefit from lower rates during off-peak hours, incentivizing usage when demand is low.

There has been a 5% increase in domestic power prices, particularly noticeable during peak hours (5 PM onwards), leading to higher costs for consumers.

Consumer Awareness and Billing Issues

Consumers often do not realize the impact of their consumption patterns on billing; many are unaware of how increased gadget usage affects their electricity bills.

Concerns were raised about high bills for closed premises, indicating a need for intervention if billing does not reflect actual usage.

Infrastructure and Safety Considerations

Accessibility of meters is crucial; they should be easily readable by meter readers for safety and efficiency.

The discussion highlighted the importance of proper installation to prevent damage from environmental factors like rain.

Smart Metering and Public Communication

The integration of smart metering with existing infrastructure is ongoing, with public communication efforts aimed at clarifying benefits and processes.

A proposal was made that those who have not complied with regulations should face consequences, emphasizing accountability in meter installations.

Prepaid Metering System Insights

The introduction of prepaid metering aims to improve payment compliance; consumers will pay upfront based on their estimated monthly usage.

Concerns were expressed regarding potential service interruptions due to non-recharge situations, especially in emergencies.

This structured summary captures key discussions around power consumption, billing issues, infrastructure challenges, smart metering initiatives, and the implications of a prepaid system. Each point links back to specific timestamps for easy reference.

Discussion on Electricity Tariffs and Infrastructure

Concerns Regarding Business Impact

A participant expresses concern about the financial burden of electricity tariffs on businesses, suggesting that household bills are manageable but business expenses should be reconsidered.

The speaker highlights the high unemployment rate in certain areas, questioning whether the current tariff structure is beneficial for those affected.

Technical Aspects of Power Supply

A technical description is provided regarding the parallel lines used in power distribution, indicating a structural aspect of electricity supply.

Discussion includes how government initiatives to improve lighting have not effectively reduced costs or improved service reliability.

Financial Implications and Revenue Gaps

There is a mention of how tariff decisions are made based solely on cost considerations without addressing existing dues and interest components.

A participant raises concerns about revenue gaps reported by the department, questioning whether initial estimates were accurate or misleading.

Infrastructure Development and Budget Constraints

The discussion shifts to infrastructure spending, with emphasis on budget constraints despite increased capital expenditure claims from officials.

The need for a shift towards green energy solutions is highlighted as essential for future sustainability amidst rising operational costs.

Public Engagement and Transparency Issues

Participants express frustration over lack of public consultation regarding significant changes in tariffs and infrastructure projects.

It’s noted that ongoing examinations by commissions will address discrepancies in reported figures related to uncontrollable costs affecting consumers.

Political Interference and Infrastructure Challenges

Discussion on Political Influence

The speaker discusses the impact of political figures on decision-making, emphasizing the emotional discouragement that can arise from their influence.

Clarification is sought regarding business operations and infrastructure needs, highlighting the importance of addressing disruptions in local constituencies.

Budgetary Concerns

A gap in budget allocation is noted, with references to market costs and commission discrepancies affecting project execution.

The need for transparency in financial dealings is stressed, particularly concerning variations in budget percentages that raise doubts about fiscal management.

Issues with Tourism and Local Economy

The discussion shifts to tourism challenges, including illegal activities impacting local businesses and a lack of oversight by government departments.

Concerns are raised about online booking platforms like Airbnb affecting local tourism dynamics without proper regulation or record-keeping.

Solar Energy Transition and Technological Solutions

Exploring Solar Energy Initiatives

A proposal for transitioning to solar energy sources is introduced as a means to reduce consumer power burdens while enhancing sustainability.

The feasibility of implementing solar technology is discussed, noting the necessity for robust infrastructure to support such initiatives effectively.

Technical Challenges in Implementation

There are concerns regarding existing high-tension wiring systems that complicate new installations; these issues have persisted over time without resolution.

Technical faults related to underground cabling are highlighted as significant obstacles, causing delays in project completion due to difficulties locating issues.

Discussion on Project Management and Technology Implementation

Challenges in Technology Projects

The speaker reflects on the potential mistakes made in project management, emphasizing that certain technologies should not have been allowed to proceed without proper checks.

There is a concern about the lack of responsibility taken for decisions regarding technology implementation, highlighting the need for accountability.

The discussion touches on the speed at which problematic technologies can be removed from projects, indicating a desire for efficient solutions.

Government Oversight and Consumer Protection

The conversation shifts to government involvement in technology implementation, stressing that new technologies must undergo thorough checks before being rolled out to consumers.

Acknowledgment of the importance of state-level oversight is made, with an agreement that proper evaluations are necessary before passing any new technology.

Project Status and Benefits Discussion

Questions arise regarding the status of a specific project (referred to as "tan project") and its benefits, suggesting that there may be more to discuss than what was initially planned.

The speaker indicates willingness to engage in further discussions about project details in one-on-one meetings after the current session concludes.