Power crisis in Andhra Pradesh

The one good thing about the rapid change, that seems to characterize the world we inhabit in, is that the chickens are coming home to roost much faster than expected.

The free power for all farmers was introduced with much fanfare in May 2004. The Spin doctors got into the act and praised this wonderful scheme that in their view had no cost associated.
From Business Line 21 May 2004 : Free power, waiving of arrears to boost power utilities' cash flow

"Now, the uncollected power bills would be paid by the Government. Besides, as the power is provided free of cost, there would not be any cases of power pilferage. This meant that the State Government would also be paying for the loss incurred by APTransco so far on account of unauthorised agricultural and one-bulb connections in cash. The corporation has also been relieved of the headache of collecting electricity charges and its operating staff can concentrate on other services," the officials stated.

Even a year back it was all hunky dory
From Hindu 23 March 2005 : No change in power rates for 7 categories

In case of the agriculture sector, the commission endorsed the Government's free power scheme and the internal arrangements thereto. Accordingly, farmers cultivating dry lands and those having less then 2.5 acres of wet lands and using up to three pump sets need not pay anything whether or not they implement demand-side management devices like capacitors. Corporate farmers and IT asses sees will have to pay Re. 1 per unit with such devices and Rs. 2 per unit without them.
.....
The APTransco would have surplus availability and might be in a position to sell power to other States.

And here we are two and half years from when the free power was introduced and things don't seem to be going right ...

From Hindu 27 December 2006 : Power supply turns critical in AndhraPradesh

Irate farmers attacked electricity installations and offices across the State as the power supply situation turned critical for the second time during this season on Tuesday in the wake of a severe shortage of 10 million units a day.

From Hindu 27 December 2006 : Power cut schedule notified

Faced with a worst power crisis leading to protests from farming community all over the State, the Government has announced power cuts in urban areas from Wednesday onwards. The load relief schedule for Ranga Reddy district has been officially announced on Tuesday.

So what went wrong? Why are the farmers, for whose benefit this scheme was conceived, agitating ? Nothing really. Fifty years back you could have announced such a scheme, and then won a couple of elections based on the scheme's "success" before running into problems. Now the speed at which knowledge disseminates, the rate at which people adapt to new conditions has changed and you just run into problems earlier than expected.

One possible solution : Change the way the scheme is organized. Instead of giving free power ( and not monitoring its consumption), bill every farmer for his power. Offer him a subsidy equivalent to amount he would spend if he used an energy efficient motor for the number of hours that you wish to subsidise. Lets say your target is small & marginal farmer, running three 5 HP pump. You want to subsidize one crop a year. You could then say exempt, 3*5*.746*8*30*4 = 10800 KW( Assuming subsidy is only for three, 5 Horse Power pump, given .746 KW = 1 HP, run for 8 hours , 30 days a month , 4 months a year ) or charge this at the current rate 20 ps per KW. Any power consumed above this limit will need to be paid for at the market rates.

The advantages
1) You need not restrict the farmer on which crops he can grow. If he wishes to grow paddy for both Rabi & Kharif he can do so.
2) The subsidy is more targeted. The big farmer ( who runs multiple pumps) can at most claim subsidy for three pumps. For the rest he would have to pay market rates.
3) Since power is not free, there will be judicious use of it. You need not exhort farmers to install capacitors & other energy saving devices, They will do it themselves as it makes sense to them
4) If all farmers are billed, you can no longer hide the power pilferage under broad heading of supply to agriculture & T&D losses.

Will this scheme or any thing that tides over the current distress get implemented? No. The biggest gainers of the free power are our big farmers, people who have so much land that they do not know how much they have, like our CM and every other politician that you can think of.