Majority of states oppose Electricity (amendment) bill

Majority of states oppose Electricity (amendment) bill
Sunday May 31, 2015

Majority of the states have opposed the Electricity (amendment ) bill while making submission before Standing Committee of Parliament.
The Standing Committee on Energy, Lok Sabha submitted its report on the Electricity Amendment Bill 2014 to the Government on May 7. The report contains the observations and comments of 18 State Governments. The major concern of all the states is segregation of carriage and content which is the most vital proposal of the Electricity Amendment Bill is not workable.
Tamil Nadu has clearly opposed the proposal of separation of carriage and content in one stroke and has claimed that this will make all the State utilities unviable. The reason is that we are giving unbridled access to private players to cherry pick consumers who are high paying and who can be supplied power directly. He is not
going to make any investment into distribution network. Without making investment into distribution network, he is getting best paying consumers for supply electricity and that too without loss. Further he will cherry pick the consumers in urban areas or high value consumers in rural areas. The state is e against it in totality.
Karnataka and Assam Governments said that the carriage and content is good in principle, which is futuristic. In this situation where we have shortages in supply and when the infrastructure development is not full and we are not in a position to supply 24×7 power in all the areas, it may not be prudent to have this under present
circumstances. The choice to the consumer should be available. But there should not be a choice to the supply company.
Gujarat Government said that unless a level playing field is provided to all the suppliers,the challenge of actual implementation on the ground is very difficult. Then it is going to be a collapse of system. In the process, it is the common consumer who will suffer. It is only the industrial commercial and high end consumers who will benefit but everybody else will suffer.

Himachal Pradesh Government has claimed that for the present, the unbundling that has happened between distribution and generation, in our opinion has not matured.Further unbundling of distribution sector into supply and distribution segments will first of all have an impact on the cost. Ultimately the cost is to be borne by the consumer because of the multiplicity of units. We are worried about the additional cost of this further unbundling to the consumer will be more. On that account, we are saying that it should not be straight away made mandatory for us.
Orissa claimed that separation of carriage and content will require massive infrastructure, up-gradation in metering. We will have to define at some stage the interface between distribution licensee and supply licensee. In the bill, it is proposed that it should be in the consumer’s premises. We feel this will be extremely difficult.
This would lead to a lot of litigation and disputes will arise which will be overwhelming.The disputes will be so overwhelming that most of the State Governments will be forced to abandon this scheme even in the initial stages. The state has suggested that to begin with the distribution transformer may be at 33/11 KV level or below 11/LT level should become the segregation point between distribution licensee and supply licensee.

Maharashtra ,Bihar , Assam , Kerala, Goa ,Jharkhand and Delhi also highlighted the the problem of cherry picking . The responsibility for power supply is another issue. When the incumbent licensee’s cost of operation itself is on the higher side, the new supplier who is coming in, will be able to get power which is already contracted by the distribution licensee at lower rates and supply it to the high end consumers. It means that the incumbent licensee will bleed.
The other states including Madhya Pradesh, Telangna, Uttrakhand , Andhra Pradesh highlighted the issues relating to cross subsidy , apportionment of losses , assignment of PPAs. There should be a system where consumer has the choice to choose the supplier rather than the supplier choosing the consumer. Rajasthan said that the state
entities should not be over burdened because of cherry picking.
The state of Punjab, Haryana, Uttar Pradesh . West Bengal though attended the Meeting but did not find mention in the report regarding their view points.


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