MahaVitaran's Path to Profitability : MahaVitaran Set to Achieve Profitability, Stock Listing Expected by March 2027: CMD Lokesh Chandra (IANS Interview)

Mumbai, March 14 (NationPress) Following Chief Minister Devendra Fadnavis's recent announcement in the Assembly regarding the state's power distribution company (discom) being the first to be listed on stock exchanges, Maharashtra State Electricity Distribution Company (MahaVitaran) CMD Lokesh Chandra emphasized that they are actively pursuing capital expenditure (capex) plans to facilitate a turnaround and reduce tariffs for various consumers.

In an exclusive interview with IANS, MahaVitaran Chairman and Managing Director (CMD) Lokesh Chandra elaborated on the discom's approach.

IANS: When is the expected listing date? What strategies are in place to enhance MahaVitaran's financial stability and profitability?

Lokesh Chandra: The listing of MahaVitaran is slated for the next two years, prior to March 2027. To strengthen MahaVitaran's financial health, we have developed the Resources Adequacy Plan in a scientific and meticulous manner to ensure cost optimization. Maharashtra stands as the first state to have not only finalized its Energy Transition Plan in conjunction with the Resource Adequacy Plan but has also commenced its implementation. Over the past two years, we have finalized power purchase agreements totaling 45,000 MW capacity. Within the next five years, our share of Renewable Energy will rise from the current 13 percent to 52 percent. Since independence, we will achieve an installed capacity of 36 GW, which will expand to 81,000 MW by 2030. With cost optimization, we anticipate savings of Rs 1,13,000 crore over the next five years, thus reducing our power procurement costs.

In our recent tariff petition submitted to the Maharashtra Electricity Regulatory Commission (MERC) for the control period spanning 2025-2030, we proposed a decrease in power tariffs for both the Industrial and Residential Sectors. Additionally, we suggested a 10 percent rebate during solar hours for domestic consumers, and we have entirely eliminated the cross-subsidy burden on industries arising from agriculture. We have introduced a Time of Day tariff during solar hours, offering a rebate of Rs 2.40. These initiatives, along with the establishment of a separate entity for agriculture, are set to significantly enhance MahaVitaran's financial metrics. We are confident of soon becoming a profit-making organization and proceeding with the listing of MahaVitaran within the next two years.

IANS: What is your capex aimed at reinforcing the distribution network?

Lokesh Chandra: In formulating the Resource Adequacy Plan, we also assessed the investment needs for both the transmission and distribution sectors. It is estimated that Maharashtra's total investment in the power sector will reach Rs 3,30,000 crore over the next five years, with Rs 70,000 crore allocated for transmission and Rs 65,000 crore for distribution. Notably, 70 percent of this investment will be sourced from the private sector, amounting to approximately Rs 2.5 lakh crore in Maharashtra, which will generate 7 lakh jobs. We have already initiated work on Rs 20,000 crore schemes for system strengthening and modernization, while another Rs 45,000 crore are in the pipeline. Once these projects are completed, we are optimistic about providing our consumers with adequate, reliable, and quality power from sustainable sources at affordable rates.

IANS: How is MahaVitaran currently positioned financially, especially with regard to increasing arrears from agricultural consumers?

Lokesh Chandra: By 2030, the energy demand in the state is projected to escalate from 1,85,000 million units to 2,80,000 million units, with peak demand rising from 29 GW to 45 GW. Our energy consumption is expected to surpass that of Spain, Italy, Germany, and Australia. Our annual revenue exceeds Rs 1,22,000 crore and we serve more than three crore consumers. Maharashtra has the highest agricultural demand at 16,000 MW. The issue of agricultural arrears continues to challenge our financial health, as we currently face over Rs 75,000 crore in agriculture arrears, while our total liabilities amount to around Rs 90,000 crore. To address the agricultural arrears dilemma and ensure reliable power supply to farmers during the day, we have initiated the world's largest distributed renewable energy program dedicated to solarizing agriculture feeders.

We will be the first state in India to shift 100 percent of the agricultural load (16,000 MW) to solar energy. Our Mukhyamantri Saur Krushi Vahini Yojana 2.0 Scheme is designed to provide daytime power to farmers. Additionally, Maharashtra is pioneering the establishment of a separate agriculture company to supply power to farmers, which will ensure that future agricultural arrears do not affect our financial metrics. The government is also working to alleviate these burdens by assuming losses. We have requested governmental support to cover our losses, primarily attributed to agricultural arrears. We are optimistic about receiving financial assistance for these losses and resolving the current arrears and debt challenges soon.

We are also pursuing various schemes, including the Revamped Distribution Sector Scheme, aimed at enhancing and modernizing the network to reduce technical losses. The implementation of Smart Meters will contribute to minimizing commercial losses. We have already completed system metering, which includes feeder metering and distribution transformer metering, enabling us to acquire accurate energy audit data to identify areas of commercial losses. Once these initiatives are executed, we will achieve a robust financial position.

IANS: Industries have raised concerns regarding high tariffs; how do you plan to maintain competitiveness against other states?

Lokesh Chandra: In our current tariff petition, we have eliminated the cross-subsidy burden on industries. We have introduced a Time of Day (ToD) tariff incentive of Rs 2.40 per unit during solar hours. Furthermore, we have lowered the overall average cost of power supply. These measures will lead to a reduction in industrial tariffs over the next five years, ensuring that our tariffs remain lower than those in other states.

(Sanjay Jog can be contacted at sanjay.j@ians.in)