To ensure that the states can supply 24X7 electricity by March 2019, the government is planning to introduce a penalty mechanism for gratuitous load-shedding by electricity distribution companies (discoms). While speaking to the media at the conference of power and energy ministers of states in New Delhi on Thursday, power minister RK Singh said that the electricity regulators would decide the quantum of penalty to be charged to discoms if they discontinue power supply by resorting to load-sheddings even when there are no technical faults. The minister also said that most states participating in the conference agreed that electricity subsidies to needy consumers should only be passed on through the direct benefit transfer (DBT) mechanism. DBT is expected to gradually reduce cross-subsidisation, helping to moderate industrial power rates, which are as high as Rs 7-8/unit, restricting the overall growth of the industrial sector. Singh reiterated that cross subsidies should be capped at 20%, as per the electricity tariff policy.
FE had reported in July that the government was looking at replicating the DBT scheme in the power sector to meet the twin goals of curbing wasteful electricity consumption and limiting power subsidies to the really needy.
As improving electricity metering was a prerequisite for the success of the DBT scheme, Singh said that his ministry was aiming towards 100% metering, of which 90% would be pre-paid meters. Experts have pointed out that pre-paid meters would minimise payment defaults, which in turn would improve the aggregate technical and commercial (AT&C) losses in discoms through better collection efficiency. To improve electricity payment collection, the minister said he wants to completely do away with the human interface involved in the process.
“It has been observed that some states are not able to bill the consumers effectively and are losing about 50% of the expected recoveries. Where the consumers are billed properly, the recovery is around 95%,”
Speaking about the separation of carriage from content in power distribution, the minister said that the states have been asked to come up with roadmaps to implement the scheme. “One year is not sufficient to formulate carriage and content,” Singh admitted. The scheme would provide consumers the option to choose their electricity suppliers.
Reiterating what he told FE in a recent interview, the minister said that losses due to pilferage/theft exceeding 15% can’t be considered for tariff determination. He also said that the states are receiving funds of over Rs 85,000 crore under ongoing central government schemes for strengthening their power infrastructure.
Ministers from Andhra Pradesh, Arunachal Pradesh, Assam, Chhattisgarh, Goa, Haryana, Jammu & Kashmir, Jharkhand, Karnataka, Kerala, Manipur, Nagaland, Odisha, Sikkim, Tamil Nadu, Telangana, Uttar Pradesh and Puducherry were present during the conference.