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DEPARTMENT NO. 17:-

POWER SUPPLY TO AGRICULTURE

      “Andhra Pradesh will be surplus in power by the end of Eleventh five year plan” said the Union Power Minister Sri. Sushil Kumar Shinde while laying foundation stone for the second phase expansion of Simhadri power generation unit of NTPC at Visakhapatnam in first week of September, 2007.
      The union minister was commenting on the state of affairs and progress attained in A.P Power sector. Today A.P is the leader in power sector reforms in the country. AP has taken lead in early nineties to corporatize the transmission, generation and distribution of power besides promoting private participation in power generation as a part of vital reforms.
      But the credit for facilitating the last mile delivery of power sector reforms to the common man and also to ensure that its benefits reached the needy in rural sector goes to the dynamic leadership of congress chief minister Dr.Y.S.Rajasekhara Reddy. “We have succeeded in taking the benefits of power reforms to the poor in villages” says the Chief Minister.
      In addition to the free power to farm sector, the congress government has more recently initiated landmark measures, which will go a long way in improving the economic growth of the state. They include provision of free power supply to agricultural and horticultural nurseries to promote social forestry, growth of vegetables, fruit plantations and Pungamia and Jethroba plantations for generating bio-diesel.
      The state power utility- AP TRANSCO (Andhra Pradesh Power Transmission Corporation) has created a record of sorts by providing efficient and quality power supply with out hiking the tariffs for any category of consumers from three years and also by reducing the Transmission & Distribution losses to an all time low of 18.51% percent by the end of 2006-07. “Thanks to the efficient management of the AP TRANSCO that we have been successful in not raising power tariff of domestic consumers for the third consequent year” said the Chief Minister.
      The history of the nine years of TDP regime is full of episodes of atrocities on farmers and domestic consumers towards power dues (almost two lakh cases booked against defaulting farmers and domestic consumers) and its hostility towards providing free power to farmers. During the period the power tariff went up twice and four persons were killed in the police firing on demonstrators who opposed hikes in power tariffs.
      The TDP president and former chief minister N. Chandrababu Naidu had said that power lines would be used only to dry clothes without electricity, if free power to agriculture was introduced in the state. “There will be such a crisis of power supply in the state that the farmers will curse the congress for giving them false hopes and promises,“ Naidu said during election meetings.
      The commitment of the Congress Party towards welfare of the farming community, coupled with the strong will to implement the free power promise resulted in waiving of the accumulated agricultural dues. Within a year of congress assuming office, the successful implementation of the free power scheme made the former chief minister to eat his own words. Since then the free power scheme has been talk of the Nation not only for its successful implementation but also for effectively containing the spiraling farmers suicides and acting as a catalyst in increase of agriculture production in the state.
      With the free power to more than 27 lakhs agricultural pump sets, (25,51,389 officially), farmers of Andhra Pradesh have been successfully exploiting the massive rainfall showered in the State for the last three years. “Even the rain gods are in agreement with our policy of free power as they have showered bountifully for three years and given the farmers an opportunity to exploit the free power to improve their livelihood and increase food production“, says the Chief Minister Dr.Y.S. Rajasekhara Reddy.
      The successful efforts of the State Government in increasing the food grain production in the State led the Union Government to make AP as the project leader for its Food security mission to generate adequate buffer stock of staple grains in the country to meet eventualities like disasters, floods and droughts.
      On the day he took over power on May 14th, 2004 the Chief Minister Dr Y.S.Rajasekhara Reddy took landmark decision to waive farmers’ electricity arrears to the tune of Rs.1259 crore and also withdrew thousands of cases pending against farmers and the political workers who agitated against hike in power tariffs during TDP period. The number of agricultural pump sets existing by March, 2004 in the TDP regime was only 21 lakhs. Even then nearly three lakhs farmers were harassed and booked for non-payment of huge bills by the Naidu regime in its eagerness to infuse power reforms at the dictates of the World Bank

FREE POWER TO AGRICULTURE

      The TDP government of N.Chandrababu Naidu provided only 12,626 MU of power to agriculture under its subsidized schemes, which burdened the farmers to the tune of over Rs.400 crore annually. But in the Congress Government after the launch of the free power supply to the agricultural sector has been gradually increasing. The power allocation to the agricultural sector, which was 13,398 MU in the year 2004-05, touched the peak of almost 15,538 MU by 2006-07.
The state government has provided Rs.2385 crore towards power subsidy including domestic, industry and free power to farms in the 2008-09 budget as against Rs.2425 crore in the previous year.
As against  the installed capacity of 12,339 MW, the Government  plans to add another 13,661 MW(APGENCO-7109 MW,2650 MW-central sector)1993 MW-private sector-gas,309MW-non-conventional and  1600 MW through Ultra mega projects )will be  completed in the 11th plan period .
As against 183.78 lakh consumers the per capita consumption has reached 673 kWh per individual
      In spite of severe power shortage, YSR Government’s firm commitment for providing seven hours of supply per day to agriculture sector made the state power utility to purchase additional power during Rabi season of 2006 and facilitate quality and timely power to the standing crops.
          It has to be noted that  the T&D losses have been reduced to 18.51 percent  as  against  19.82 percent and during the  current  year  3204 habitations and 8,00,452 house-holds would be electrified under the Rajiv Grameena  Vidhudikrna Yojana.
          During the year the electricity charges for the industrial sector have been reduced to Rs.3.56 per unit from Rs.3.70.
      The Government also negotiated with the IPP’s which had put up power plants and idling without gas supply to reduce the burden on the state to the tune of Rs.1200 crore by re-negotiating the PPA’s with four of such private gas based power generators.
      Massive investment has been made in Power sector to promote the infrastructure to facilitate uninterrupted quality power to domestic and industrial sector besides providing quality and regulated free supply to farm sector. Since 2004 an amount of Rs.5353 crores has been spent in strengthening Transmission & Distribution infrastructure and the allocation for the year 2007-08 is Rs.1799 crores. Rs.4498 crores will be spent for improving the transmission system in the 11th plan (2007-08 to 2011-12). 10 Nos. 400 KV Sub-Stations, 28 Nos. 220 KV Sub-Stations and 42 Nos. 132 KV Sub-Stations are planned for construction during the 11th Plan period. Apart from this, the Distribution Companies have proposed to invest Rs.5848 crores during 11th plan for expansion of Distribution Network.
      “I want to assure that not a single agricultural pump will be without power supply and not a single acre will become dry without water,“ says the Chief Minister Y S Rajasekhara Reddy.
      The installed capacity of electricity generation in the state was increased from 10,696 MW in 2004 to 12,339 MW by November 2007. The metered sales increased to 55.6% and the Transmission & Distribution losses were brought down from 22.3% in March 2004 to 19.82% by March 2007. For the first time the AP TRANSCO made operating profits of Rs.291 crores in 2005-06 and the trend is continued in 2006-07 with a profit of Rs.110 crores with following financial years.
      Government has provided a subsidy of Rs.1929 crores, Rs.2063 crores and Rs.3745 crores power subsidy to agricultural sector from 2004-05 to 2006-07 respectively. Apart from this an additional subsidy of Rs.2600 crores was allocated for additional power purchases for financial year 2007-08.
      In spite of many hurdles Congress Government has been able to ensure that both the power generators and distributors in state sectors made profits by virtue of improving their efficiency in providing quality power and by regular collection of huge arrears through peaceful means.
      The power distribution system and generating units have been geared up to match the annual increase of power demand by 12 to 14 percent. Eight thousand MW is slated to be added to the state grid by the end of next five years. Unlike in the past the Congress government has refocused attention on the state power generator - APGENCO – instead of encouraging only private generators like in TDP regime. Fifteen projects with a total capacity of 3703 MW of power generation are slated to be completed by 2010.
      Under the 11th plan a sum of Rs.10346.38 crores has been earmarked for promoting infrastructure in the power sector. The agenda to provide power to 98.09 habitations including the 77.94% rural homes by end of March 2007 has already been achieved. By 2009 A.P aims to achieve 100% electrification by supplying power to all the 14,182 habitations benefiting 37,99,213 rural house holds at a cost of Rs.781.76 crore under the Rajiv Electrification Scheme.
APGENCO:
The Andhra Pradesh Power Generation Corporation, the largest power generating company in the state has an installed capacity of 6971 MW comprising of 3388.5 MW of thermal, 3586.4 MW of hydel and two MW of wind power, meeting the 56% of total power requirement of Andhra Pradesh.
      To meet the ever-growing demand for power the State Government has initiated measures to generate 277 MW in 2007-08 and totally add 7029 MW in the 11th plan period. APGENCO has plans to add 288 MW of power to the grid by the end of 11th five-year plan. During 2007-08 one unit of 210 MW of Rayalaseema thermal power project was commissioned and plans are to add another 288 MW thermal and 78 MW Hydel).
      There has been no hike in power tariff for the 1.47 crores domestic power consumers in Andhra Pradesh despite the spiraling fuel cost and power purchase cost. AP has joined the club of states, which have lowest domestic tariff of Rs.2.30 per unit in the country. It has also staggered tariff to industrial sector from Rs.4.26 to Rs.3.56 per unit in a novel measure to attract investment and promotion of industrial infrastructure in the state. The government has announced 0.75 paise per unit rebate for new industries and Rs.1.00 per unit rebate for the food processing industries.
      The huge burden on the exchequer has not deterred the YS Government from providing concessions to the poorest of the poor even in power consumption. Nearly 13.92 lakh poor domestic users who consume only 15 units of power enjoy a monthly subsidy of Rs.Ten under the “single bulb“ scheme. The residents of SC/ST colonies and the tribal hamlets also enjoy the benefit the waiver of power surcharges.
INDEPENDENCE DAY  GIFTS  TO PEOPLE
On the eve of the   Independence day celebrations of 2007 the Chief Minister Dr.Y.S.Rajasekahra Reddy made pronouncements which would go a long way in redressing the farmers problems.

  1. ex-gratia for  deaths caused by electrocutions in farms.
  2. free power to nurseries  raising seeds and seedlings  in rural and urban areas.
  3. Waiver of   accumulated surcharges  on domestic consumers

The government has introduced yet another people-friendly initiative to benefit electricity consumers -- the ex-gratia for persons, who died due to electrocution, by stepping accidentally onto loose and hanging electricity lines. 
After reviewing the incidents of electrocution deaths in the first week of August Chief Minister directed the officials to pay Rs. One lakh for electrocution deaths of adults and Rs.50,000 for deaths of children. Apart from this Government also directed the State Power utilities to provide compensation for the loss of cattle due to electrocution.
To put an end to the menace of electrocution deaths in water logged farms and fields etc., State Government also decided to take up special operation & maintenance drive to erect eight lakhs electric poles, rectify loose spans, hanging wires etc., all over the state on war footing by the end of March 2008.
Majority of electrical accidents occur due to unauthorized persons taking up the electrical repair works in villages in the absence of trained departmental persons. Hence Chief Minister instructed to speed up the process of recruitment of the Junior Linemen in the State. Already 6033 junior linemen were recruited out of the existing vacancies of 7458. The balance 1425 JLM posts will be filled as soon as the court cases associated with them are finalized.
Another initiative of YSR government in the power sector recently is to provide free power to rural nurseries. This will facilitate and boost the production of seedlings, seeds and all varieties of ornamental,
The Chief Minister also announced that all rural nurseries apart from those run on commercial scale in cities will be treated on par with agricultural connections and will be given free power.
The Chief Minister also announced the waiver of surcharge for the accumulated domestic power arrears. From now on the consumers need not pay any accumulated surcharge for their domestic arrears.
The credit for providing the last mile delivery of benefits of power reforms to consumers without hiking the tariffs for any categories of consumers for a record of three successive years goes to YSR Government in Andhra Pradesh only.
The domestic power tariffs were also kept constant without any hike for three years in spite of inflationary costs, increase in establishment costs and fuel prices. Nearly 1.48 crore domestic consumers of the state are given relief from hike in domestic power tariff which was kept at an average unit rate of Rs.2.30 per unit from past three years, one among the lowest domestic power tariffs in the entire country.
 The number of agricultural pump sets existing by March, 2004 i.e. during TDP rule was only 23.09 lakhs. Even then nearly three lakhs farmers were harassed and booked for non-payment of huge bills by the Naidu regime in its eagerness to infuse power reforms at the dictates of the world bank The TDP government of N.Chandrababu Naidu provided only 12,636MU of power to agriculture under its subsidized schemes which burdened the farmers to the tune of over Rs.400 crore annually.
The successful implementation of free power in the State has resulted in increasing the confidence of the farmers as their suicides has decreased from an alarming 1600 in the year 2004–05 to 150 in 2005 –06, and below zero in 2006-07 indicating a resurgence in the economic activity of the rural agricultural sector. 
      The free power policy has neither affected the financial progress of the utilities nor as shown any impact on power supply to domestic and industrial sectors. In fact the power utilities have achieved a financial turnover in both the consecutive financial years i.e. in 2005 and 2006. APTRANSCO and DISCOMS have supplied 13396 MU in 2004–05 and 13266 MU in 2005–06 and 15538 MU in 2006-07 to the agriculture sector. The credit for increasing the food production along with reducing the social malaise of farmer’s suicides goes to Y S R Government.
      The success of free power program in the State has made the heads turn around as more States are now showing keen interest in it. Many financial institutions like World Bank, which have once denounced and discouraged the policy of free power are now forced to acknowledge the societal benefits and the sea change in the livelihood of rural poor in Andhra Pradesh.
      “I am glad that every one has seen and understood the reason behind the program envisaged by us three years ago” says the Chief Minister Dr.Y.S.Rajasekhara Reddy. Government has provided a power subsidy of Rs.1929 crores, Rs.2063 crores and Rs.3745 crores to agricultural sector from 2004-05 to 2006-07 respectively. Apart from this an additional subsidy of Rs.2600 crores was allocated for additional power purchases for financial year 2007-08.
      “Even rain gods are in agreement with our policy of free power as they have showered bountifully during last three years and given the farmers an opportunity to exploit the free power to improve his livelihood and increase food production”, says the Chief Minister Y. S. Rajasekhara Reddy.

The Government also opened up talks with the IPP’s which had put up power plants and idling without gas supply to reduce the burden on the state to the tune of Rs.1200 crore by re-negotiating the PPA’s with four of such private gas based power generators. An amount of Rs.5353 crores has been spent in infrastructure since 2004 and the
      Congress Government has been able to ensure that both the power generators and distributors in state sectors made profits by virtue of improving their efficient functioning in providing quality power and also by regular collection of huge arrears through peaceful means.
      The power distribution system and generating units have been geared up to match the annual increase of power demand by 12 to 14 percent. 13,000 MW will be added to the state grid by the end of next five years. Unlike in the past the Congress government has refocused its attention on the state power generator APGENCO instead of encouraging only private generators like in TDP regime. Seven projects with a total capacity of 3703 MW are planned to be completed by 2010. Under the 11th plan a sum of Rs.33,185 crores has been earmarked for promoting infrastructure in the power sector.
100% ELECTRIFICATION BY 2009
      With the active support of the State government APTRANSCO & DISCOMs have undertaken massive electrification programme in urban areas. Under the “INDIRAMMA” scheme 1361 wards in Municipal areas were identified by Municipal and Urban Development authorities for electrification programme. In these wards, the identified 12991 colonies and 75099 urban households will be taken up in the FY 2006 – 07. Govt. of Andhra Pradesh has provided Rs.20 crores for electrification programme. In addition to the above, 199109 urban households will be electrified under new housing programme in FY 2006–07 with PFC / REC funding. The agenda to provide power to 98.09% habitations including the 77.94% rural households by end of October 2007 has already been achieved. By 2009 it is aimed to achieve power supply to all including the 14,182 remote households benefiting 37,99,213 families at a cost of Rs.781.76 crores under the Rajiv Electrification Scheme.
Reduction In Industrial Tariff: The average industrial tariff was reduced from Rs.3.96 in 2003-04 to Rs.3.56 in 2007-08. 
Benefits To Consumers:       The huge burden on the exchequer has not deterred the YS Government from providing concessions to the poorest of the poor. Nearly 13.92 lakhs poor domestic users who consume only 15 units of power enjoy a monthly subsidy of Rs.Ten under the “single bulb’ scheme.
The residents of SC/ST colonies and the tribal hamlets also enjoy the benefit the waiver of power surcharges. Free power supply to 13.92 lakhs single bulb households consuming 15 units per month falling in the category of 0 to 50 units.
Till now Rs.44.18 crores of subsidy is provided in this scheme benefiting 13.92 lakhs consumers. Rs.22.13 crores of surcharge on the domestic arrears accumulated up to December, 2004, was waived benefiting 17.67 lakhs SC & ST domestic consumers.
The domestic arrears related to the 6.45 lakhs consumers effective up to November, 2006, to the tune of Rs.177.23 crores is waived.

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