ERC finds Rs 98 Cr Leakages in BRS-ruled CESS in Siricilla

An inquiry by TS Electricity Regulatory Commission (TSERC) found Rs 98 crore leakages in Cooperative Electric Supply Society (CESS) in Siricilla, the constituency represented by former minister and BRS working president K.T. Rama Rao. The power regulator has also recommended its merger with TS Northern Power Distribution Company Ltd (TSNPDCL). CESS is the sole cooperative power supply society in the state which procures power from Transco and supplies electricity to consumers. The BRS-supported candidates have been managing CESS for several years.

The last elections for the CESS governing body was held in December 2022. Rama Rao had treated it on par with an Assembly election, campaigning aggressively and deputing ministers and party MLAs to Siricilla. The BRS bagged 13 out of 15 director posts in the elections. During a public hearing to finalise the retail supply tariff in February, irregularities came to light following which an internal audit was ordered on revenue realisation and the expenditure incurred by CESS. 

The audit was done for the years 2019 to 2022, resulting in the detection of revenue leakages of Rs 94.88 crore. Moreover, the assets were not capitalised for an amount of Rs 59.54 crore during the period, it was found.

The report stated that CESS had not insured the store following which it incurred huge losses during the 2018-19 floods. Similarly, a large amount was due from government departments towards subsidies, capital



expenditure and gram panchayats and the society had not sold the scrap since last one year. CESS also owes `558.44 crore to TSNPDCL towards power drawn from it. 

The TSERC found that the operations and maintenance (O&M) staff were collecting `8 lakh per month as travelling allowance, which amounted to Rs 2.9 crore in three years. Similarly, Rs 1.54 lakh per month was being paid as corporate allowance to staff working at the head office.

Interestingly, medical reimbursement of Rs 1.14 crore were released to retired employees and Rs 83.53 lakh for serving staff in the last three years, for which the Self-Funding Medical Scheme (SFMS) amount was not recovered. TSERC detected that CESS had released multiple LT power supply connections within a single premises for being utilised in similar purposes, such as industrial or commercial by deviating from the rules and regulations framed by the Commission. It has come to the notice of the Commission that the audit of CESS was being carried out by the auditors of the cooperative department, who do not have the required expertise in auditing. 

The TSERC directed the northern discom to share their EBS billing software and conduct HT services audit by their audit team to check the revenue leakages and to issue correct bills to the consumers. TSNPDCL has agreed to the request and set up a three member committee to look into the issue of CESS.