Should we have central govt copying Modi's methods ? I'd prefer Narendra Modi giving his innovative policies to all of India himself - NaMo for PM soon hopefully. Gujarat's dual power distribution model catches Centre's fancy The government is working on a proposal to replicate Gujaratâ€™s â€œdual distribution modelâ€ in the power sector across Indian states. The idea is to cut down losses from selling subsidised electricity to farmers and bring their financially-ill distribution utilities to profitability. In the Gujarat model, dual distribution lines were installed to supply power based on paying capacity of the consumers. The first line provided continuous electricity at a much higher rate, whereas the second line aimed at farmers supplied electricity for limited period at a subsidised rate. Gujarat was not only able to cut down the loss, but was able to report profit after they implemented dual distribution lines. The strategy helped Gujarat Urja Vikas Nigam Ltd (GUVNL) â€” the holding company formed after the unbundling of the State Electricity Board (SEB) in 2003 â€” to shift its financial position from a loss of Rs 1,932 crore in 2003-2004 to a profit of above Rs 124 crore in 2007-08, the first year of the eleventh Plan period. Since then, profits have jumped five times to Rs 642 crore over five years ended March 12. â€œGiven the benefits, there is a consensus in the Forum of Regulators (FoR) to replicate the model for separation of agricultural feeders (transmission lines) across states. The forum has been constantly discussing this proposal to insist upon states. If other states were to adopt the same approach, consumers will be able to get reliable power with no power outage and distribution utilities could return to profits thereby enabling investment in future projects,â€ a member of the Central Electricity Regulatory Commission (CERC) told Business Standard. FoR is a representative body of the state electricity regulatory commissions headed by CERC Chairman Pramod Deo. The member also informed that the FoR had recently commissioned a study on the matter. He also said, as part of the initiative, the government is going to press for adequate metering of power supplied to the farming community. â€œThis will also help us in identifying where exactly is the subsidy for farmers going. Over a period of time, cross-subsidy should go away and all users, at least rich farmers, have to pay at least the production cost of power,â€ he said. Supply of free or subsidised power to farmers, a politically sensitive issue, has resulted in losses for state power suppliers as cost of production increased because of rising fuel costs (coal and natural gas). In addition, industries are often forced to pay much higher to compensate for subsidy loss. In a bid to cut down transmission losses and optimize the distribution of power in the state in 2006, Gujarat had bi-furcated the rural supply to give farmers an eight-hour supply at a cheaper rate for irrigation on a three-phase line and rural households were given 24-hour reliable power on a single-phase line. This separation of agricultural feeders which use heavy loads of upto 10-15 Horse Power (HP) capacity for running pumps from domestic supply, resulted in additional revenue for the state from increase in duration of power supply to rural households apart from round-the-clock supply of power to consumers. The three-phase line for irrigation also helped in saving power, as the high-current lines trip in case illegal hooking takes place anywhere in the area. Indiaâ€™s state discoms had accumulated losses of Rs 2.4 lakh crore on March 2011. This was the direct result of the gap between average revenue realised and the cost of supply. With input cost rising at the back of fuel charges and revenue coming under constraints due to stagnant tariffs, the gap rose to 145 paise a unit (kilowatt per hour) in 2009-10 from 76 paise in 1998-99. The combined debt of discoms reached Rs 1.9 lakh crore in March as more and more distributors opted for loans to meet even operational costs. The government had to announce a historic financial restructuring package for bleeding discoms recently.