The distribution franchisee (DF) operations of Torrent Power in the industrial-centric areas of Bhiwandi and Agra were impacted during the first quarter of FY21, the company said in a media release.
Commenting on the company’s financial results for the first quarter (April 1 to June 30) of ongoing fiscal year FY21, Samir Mehta, the company’s chairman noted, ““COVID pandemic has drastically impacted electricity demand & customer payments, posing unprecedented operational and cash flow challenges, in both generation and distribution of electricity across the power sector. For Torrent, the financial impact has been more pronounced in our Franchised Distribution business in Agra and Bhiwandi.”
Both Agra (Uttar Pradesh) and Bhiwandi (Maharashtra) have a predominant number of consumers falling in the C&I (commercial & industrial) category. Like the rest of the country, power demand from the C&I sector fell drastically during the lockdown months, only to be offset in some measure by higher demand from the residential sector.
In Bhiwandi, T&D losses rose to 24.53 per cent in Q1FY21 from 14.32 per cent in Q1FY20. Similarly, for Agra, the comparable metrics were 22.75 per cent and 19.02 per cent. Electricity sales in Bhiwandi during Q1FY21 were 435 million kwh (million units or MU), as much as 53 per cent lower than the 929 MU sold in Q1FY20.
The textile-centric Bhiwandi area was in fact the first instance in the country of privatizing power distribution through the DF model. Torrent Power is credited for having ushered in much commercial efficiency in this troubled area over the years. When Torrent Power took over operations in January 2007, the AT&C losses in Bhiwandi were an appalling 60 per cent, which are now at optimal levels. For instance, over the past five years, AT&C losses in Bhiwandi consistently declined from 22.35 per cent in FY16 to their all-time annual low of 11.93 per cent in FY20.
SMK Operations
It may be mentioned that Torrent Power took over franchisee operations in the Shil-Mumbra-Kalwa (SMK) area in Maharashtra, on March 1, 2020. The agreement is for a 20-year period, up to February 29, 2040. The SMK area has a consumer base of 2.48 lakh and is spread over an area of 65 sqkm.
Torrent Power expects to invest Rs.300 crore in the franchised area during the agreement term. Of this, Rs.150 crore is envisaged to be invested within the next five years. Torrent Power has targeted to bring down AT&C losses, which stood at 47 per cent in FY17, to less than 12 per cent over the next 15 years.
