Power minister RK Singh on Monday referred to as for instant correction of incorrect policies like continuing state subsidies for big sections of electrical energy shoppers and billing-and-collection inefficiencies which preserve state distribution providers (discoms) in poor economic overall health.
Stressing the need to have for robust and sustainable income stream for discoms which have been offered numerous bailout packages, the minister noted that half-hearted reforms beneath Electricity Act 2003 was also to blame for the present state of affairs. Distribution providers are nevertheless to be totally removed from the clutches of the state governments, so they are not in a position to take industrial choices in a no cost manner.
Speaking at a Ficci occasion, the minister stated that most of the state discoms are loss-producing in contrast with the private discoms and franchisee providers exactly where the AT&C losses are much less than 10% and all are lucrative.
The state discoms are not in a position to spend for energy and resort to load shedding. They fail to preserve the program. The trend is going on for decades and each six to seven years the central government injects funds to strengthen the distribution program, but it does not totally resolves the issue.
The minister noted that if lack of efficiency in billing and collection is set suitable, each discom will turn out to be lucrative as it will include things like billing of electrical energy that is lost due to theft. “We have suggested usage of pre-paid meters, which stops any human interference. But it is not happening in rural areas and North India. One major reason for that is drop in number of meter readers who have not been recruited by state discoms after the readers have retired. The drill of central government of recruiting meter readers is lost,” the minister stated.
“Even I will not be able to pay 4-5 bills at a time,” he stated. The minister also stated that there is absolutely nothing incorrect in providing no cost electrical energy to buyers by state government but they should really spend for the electrical energy as it is not no cost. The coal and freight providers have to be paid even the water for energy generation has to be paid.
He also noted that the state regulators are appointed by discoms and are not at arm’s length. They are acting on behest of the state government. Especially, when the tariffs have to be enhanced there is stress on regulators to preserve the tariffs low, which leads to losses. He cited an instance of a state exactly where the tariffs have not enhanced for 3 years and the state is in economic difficulty.
The minister stated that he has been informed that some generation providers have been conniving with states governments and indicating by way of regulators that they have received the letter of credit just to continue their provide of energy uninterrupted as switching off and restarting a energy plant is pretty hard.
“But in a relationship one has to be disciplined. If the letter of credit is not received the power should be stopped immediately to maintain transparency in the system and also to improve the overall health of the discoms,” Singh stated.