Transition from flat to metered electricity tariff in agriculture: Who gains and who loses? Evidence from West Bengal, India. A. Mukherji, B. Das, N Majumdar, N. C. Nayak, R. R. Sethi, B.R. Sharma & P.S. Banerji Presented at the International Conference on Water Resources Policy in South Asia, December 17-20, 2008, Colombo. International Water Management Institute (IWMI)

1. Transition from flat to metered electricity tariff in agriculture: Who gains and who loses? Evidence from West Bengal, India A. Mukherji, B. Das, N Majumdar, N. C. Nayak, R. R. Sethi, B.R. Sharma & P.S. Banerji Presented at the International Conference on Water Resources Policy in South Asia December 17-20, 2008, Colombo

7. West Bengal: A state that bucks the trend in GW* and electricity * GW- groundwater Punjab, Haryana, Gujarat, Tamil Nadu West Bengal Over-exploitation of GW Under- development of GW (42% development) > 60-80% electric pumps < 20% electric pumps Free/very low flat rate Highest flat rate in India High fiscal deficits due to electricity subsidy Non-existent electricity subsidy

9. Electricity reforms in WB*: The high-tech way Contd… Tamper proof TOD meter (with optical load sensor) Meter Reading Instrument (MRI) for data capture and transfer to computer Engagement of SHG* Introduction of GSM and GIS technology for monitoring *WB: West Bengal *SHG: Self Help Group Photo Credit: Aditi Mukherji

10. Hi-Tech Metering Technology Source: Adapted from Tongia, R., 2004. What IT can and cannot do for the power sector and distribution in India: link to reforms, incentives and management , Working Paper #19, Program on Energy and Sustainable Development, Stanford University.

12. Submersible pump owners Gainers 63% Centrifugal pumps owners Gainers 74% Gainers and losers among pump owners Source: Mukherji 2004 survey

14. Hour: 1500, Energy cost: Rs 9000 Self irrigation Hour: 700 Energy cost: Rs 4200 Saving in electricity bill Rs 6600 Break even point Hour: 1927 Energy cost: Rs 10800 Selling irrigation Hour: 800 Earning: Rs 14400 Profit in flat tariff system Rs 3600/yr/TW Profit in meter tariff system Rs 5400/yr/tw ‘ no gain no loss’ 1050 hr ‘ no gain no loss’ 1300 hr 250 hr Annual flat tariff, Rs 10800 Rs 6/hr Rs 18/hr What happens to the size of GW markets? The Average Scenario: GWM will contract Source: Figure created by Mukherji A. based on data from Mukherji, A. et al. 2009. Metering of agricultural power supply in West Bengal, India: who gains and who loses? Energy Policy, 37(12):5530-5539. 4000 8000 12000 Annual cost of irrigation in Rs O 200 400 600 800 1000 1200 1400 16000 20000 1600 1800 2000 Annual hours of irrigation 22000

15. 4000 8000 12000 Annual cost of irrigation in Rs O 500 1000 1500 16000 20000 2000 Annual hours of irrigation 24000 28000 2500 Annual flat tariff, Rs 10800 Break even point Hour: 1927 Cost: 10800 Total irrigation Hour: 2400 Energy cost: Rs 14400 32000 Self irrigation Hour: 1500 Energy cost: Rs 9000 Selling irrigation Hour: 900 Earning: Rs 16200 Profit in flat tariff system Rs 5400 Profit in meter tariff system Rs 1800 2250 2100 An exceptional case: GWM expands Gainer and loser in meter tariff system Source: Figure created by Mukherji, A. based on data from Mukherji, A. et al. 2009. Metering of agricultural power supply in West Bengal, India: who gains and who loses? Energy Policy, 37(12):5530-5539.

23. Thank You www.iwmi.org Related Publication: Mukherji, A. et al. 2009. Metering of agricultural power supply in West Bengal, India: who gains and who loses? Energy Policy, 37(12):5530-5539. Available online at www.elsevier.com/locate/enpol

24. Rapid increase in groundwater irrigation Source: Government of India data, 1950-2000

26. Source: Mukherji, A.

27. Comparison of flat tariff in different states, 2006-07 Source: Chart created by Mukherji,A based on data from Mukherji, A. et al. 2009. Metering of agricultural power supply in West Bengal, India: who gains and who loses? Energy Policy, 37(12):5530-5539.

28. Electricity subsidy as percentage of state fiscal deficits, 2000-01 BRISCOE, 2005

29. Increase in water price after metering Source: Graph created by Mukherji et al. based on data from 2 nd CGA 2008 survey.