Inflated Power Bills of Maharashtra Farmers Smell of ‘Scam’

A detailed story on the financial mess of the Maharashtra State Electricity Distribution Company Limited (MSEDCL) done by Newsclick has revealed shocking facts, particularly regarding the power consumption by Krushi (agriculture) pumps, which smell of a scam. A third-party audit into the revelations could unearth a scam of thousands of crores per year. The Maharashtra Vij Grahak Sanghatana (Maharashtra Electricity Consumer Organisation) has already demanded an investigation.

According to a recent MSEDCL presentation made to chief minister Uddhav Thackeray, agriculture consumption of electricity is 31%. According to farmer leaders, experts and even some of the ministers present during the meeting, the information is incorrect.

There are several types of agriculture pumps depending on horsepower (HP). Pumps without meter are of 5 HP, 7.5 HP, 10 HP, etc. In 2019, the Maharashtra Electricity Regulatory Commission (MERC) constituted a ‘Working Group for Agricultural Consumption’ to find out the consumption by agriculture pumps. The working group sampled 502 feeders. The study found that the farmers were being charged for almost the double the units they had consumed. For example, a farmer using 5 HP pump was shown to have consumed around 625 units per month as against the actual consumption of about 200- 300 units.

In June 2015, the-then Bharatiya Janata Party government in Maharashtra had formed a fact-finding committee following the complaints of excess billing of farmers. The committee had asked Bombay-IIT to study the power consumption by farmers across the state. The report, submitted by IIT-Bombay in September 2016, revealed that a farmer consumed power for 1,064 hours in 2014-15 and 1,063 hours in 2015-16 on an average as against the MSEDCL’s figures of 1,785 hours in 2014-15 and 1,900 hours in 2015-16.

After this report was public, Sanghatana members met then-CM Devendra Fadnavis demanding rectification in the bills. Despite Fadnavis’ assurance, the bills haven’t been rectified.

“Both the studies revealed how the distribution company [MSEDCL] purposely showed that the farmers had consumed extra units. There are two reasons: first, to cover up the massive theft of power and the loss in transmission and second, to get more subsidy from state government. This is double scam,” alleged Pratap Hogade, chairman, Maharashtra Vij Grahak Sanghatana.

Contrary to the MSEDCL’s claim of 31% agriculture power consumption, the studies in 2015 and 2019 show that it could be around 15%. Understandably, the remaining 15% is power theft plus loss in transmission. The power department already shows loss in transmission up to 10%. If added to the figures shown as extra consumption by the farmers, the transmission loss would be much more.

“With two reports in hand, the state government can form a committee to study the irregularities. We are sure that the loss is 25%-30% and the agriculture consumption is not more than 15%,” Hogade added.

The difference between the actual power consumption by the farmers and the inflated figures on record has another angle too. The state government pays subsidy arrears to the MSEDCL every year for the agriculture pumps.

The current subsidy rate for a 5 HP pump per unit is Rs 1.56 whereas the commission has finalised the per unit rate at Rs 3.29. Therefore, the state government has to pay the arrears to the power distribution company at Rs 1.73 per unit. Since the farmers on record have consumed 31% electricity, the arrears have to paid at the rate of Rs 3.46 per unit (Rs 1.73 x 2). The state government paid a subsidy of Rs 6,000 crore in the last financial year, which should have been Rs 3,000. The MSEDCL, whose loss runs into Rs 74,000 crore, has claimed a pending amount of Rs 49,000 crore on the basis of double the power actually consumed by the farmers.

“We have been demanding an investigation into the inflated electricity bills of farmers and the subsidy given to the distribution company. The farmers are criticised for not paying the power bills despite getting subsidy. In reality, they are being used to cover up the massive corruption in the power department,” alleged Ajit Navale, general secretary, All India Kisan Sabha.