Electricity use in agriculture: Deliberaterly messy data

14 Jul

Yesterday I wrote about inconsistent data on pumps and tubewells in India. That inconsistency, I think, stems from sheer apathy and lack of coordination among data collection agencies. It’s frustrating, but not quite as frustrating as dealing with agricultural electricity consumption data which is not only messy, but made messy on purpose. Indeed, two policies are responsible for the deliberate misreporting of electricity consumption in agriculture. One is the indirect subsidy payment regime in which the state government reimburses the electricity distribution company (DISCOM) an amount equivalent to the electricity that they supplied to the farmers. Second, the policy decision taken some 25-30 years ago to remove meters from all agricultural tubewells means that no one, not even the DISCOM, really knows the amount of agricultural electricity consumption. The electricity company has all the incentive in the world to claim a higher subsidy than they actually provided to the farmers and in the absence of metering, it is not easy to pin them down.

This is where the State Electricity Regulatory Commissions (SERCs) come in. Their role, among other things, is to examine the veracity of subsidy claims of the DISCOMs.  In Punjab, the utility and the SERC have been engaged in a game of cat and mouse since the early 2000s – the regulators constantly upbraid the utility for submitting exaggerated claims and reduce it by 5 to 15% every year, while the utility keeps trying to justify its claims. Punjab SERC pretty much forced the Punjab State Electricity Board (PSEB) to install meters on 10% of agricultural tubewells and now use these meter readings to approve any subsidy claims.  Karnataka SERC, on the other hand, does not seem to be able to convince its DISCOMs to do a better job of energy accounting. Here, most DISCOMs grossly exaggerate the number of electric pumps and therefore, end up claiming a much higher subsidy for providing electricity to farmers than they actually do. SERCs have not yet been able to get the DISCOMs to do a decent job of tubewell census – let alone sample metering.

While all SERCs have the same mandate as per the Electricity Act of 2003, some SERCs do a better job than others. Why this is so is an interesting research question. Regulatory capture by the state comes readily to my mind as an explanation. But this needs more systematic analysis — something I intend to do in the future.

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