BUDGET 2019 - is disappointing for Power Sector and Working Class. Finance Minister has not given any proposal how the mounting losses of DISCOMS will be reduced so that common consumers may get electricity at affordable rates.
One Nation One Grid concept is useful only when all power utilities of State are integrated for which no mention in Budget proposals.
Finance Minister has mentioned about UDAY scheme but due to wrong policies of Government purpose of UDAY is not fulfilled and losses of state DISCOMS have again gone up to pre UDAY level. Central Government had launched the UDAY scheme in 2015 for the financial and operational turnaround of power DISCOMS. Finance Minister has said we are examining the performance of the scheme and will work with states to remove barriers like the Cross Subsidy Surcharge. But the fact is that the combined external debt of DISCOMS is set to rise to pre-UDAY levels of Rs 2.6 lakh crore by March 2020 from Rs 2.28 lakh crore in March 2019 and Rs 1.85 lakh crore in March 2018.
DISCOMS debt was at Rs 2.75 lakh crore in September 2015 and fell to Rs 1.94 lakh crore in March 2016 after Uday. Ministry of Power agrees that the DISCOMS only cannot be blamed for the rising debt and the dues as electricity tariffs were often not keeping pace with rising input costs. Nothing has been said in Budget in this respect as how DISCOMS can be turned around.
Govt policies are only to be blamed for mounting losses and debt of DISCOMS. A review document of UDAY last month shows government departments and local bodies running up power dues of Rs 41,386 crore in the first nine months of 2018-19.
In contrast, DISCOMS overdue payment to power stations during the same period stood at Rs 22,061 crore, or nearly half the unpaid amount from government departments and ULBs — government offices, police, fire, water and sewage departments as well as other civic bodies.
Such large unpaid bills adversely impact cash flow and operational capability of DISCOMS. The impact gets magnified by other issues such as inadequate tariff revision and delayed subsidy.
One Nation One Grid is a good concept and we can achieve One Nation One Grid & One Tariff with this concept. But One Nation One Grid & One Tariff is not possible in present scenario where one state is having five or multiple DISCOMS and several other power utilities. For success of One Nation One Grid first requirement is to integrate all power utilities at least in one state for which no mention in Budget is disappointing.
NEW TARIFF POLICY SOON
Power Minister R K Singh has said the Ministry of Power will seek the Union Cabinet's approval for power tariff policy, which would provide for a penalty for unscheduled power cuts by distribution companies. The policy provides for penalty for unscheduled
power cuts except in the case of technical faults or act of God (natural calamities). State power regulators would ascertain the penalty on distribution companies (DISCOMS) for voluntary load
shedding. Once the tariff policy is approved, the DISCOMS would not be allowed to pass on losses beyond 15 per cent. The new power tariff policy would also encourage time of the day tariff where consumer would be charged more during peak
hours.
Niti Ayog Strategy Paper – High Powered Committee Report & Five Year Vision Document For Power Sector
Government Of India, Ministry Of Power has circulated Five Year Vision Document For Power Sector. Document clearly envisages path for privatization of Power Supply by segregating wire and content business. This vision document is based upon Niti Ayog Strategy Paper and High Powered Committee Report. All these documents are in same direction of privatising power supply and introducing more private participation in transmission sector. Policy is to help IPP's in the name of stressed power plants by way of shutting down state owned thermal power plants.
NITI AYOG Strategies for Energy Sector from Page 61 to 65. Carefully read top 2 paras of Page 64 - stating privatisation of Discoms & Urban Distribution Franchisee
In report Of High Level Empowered Committee
page number 36 with head line Recommendation to facilitate sale of power of stressed power plants. Heading itself tells recommendation is to facilitate mostly private houses at cost of State owned power plants by closing them in next two to three years in the name of high heat rate and non complying with new environmental rules. This is a conspiracy to close down state owned power stations. Please start mobilisation at State level against such designs aimed at to destroy public sector to facilitate private houses
As per report MoP is of the view that the only credible solution is for the Government to exit from the business of supplying power to the retail consumers altogether and allow new suppliers and competition to step. MoP is of the opinion that the State Government utilities can continue to own and operate the wires infrastructure and multiple supply licences be allowed in supply business. This is nothing but pushing further the same Electricity (Amendment) Bill 2014/2018 which could not be passed in 16th Lik Sabha and lapsed with the term of 16thLok Sabha. We successfully fought to stall Electricity Amendment Bill 2014/2018 in last five years.
We will again oppose any such move. We will decide our course of action whenever required to prevent any enactment paving the path of privatisation. We have to be watchful and we will decide any action plan very carefully.
REVIEW OF PPA's
AIPEF fully supports Andhra Pradesh Governments pledge to review PPA's done by previous Government in power purchase agreements, resulting in exorbitant tariffs. The tariff in solar power in some PPAs is about Rs. 15 per unit whereas the present trend is less than Rs. 3 per unit.
But Energy Secretary Government of India in a letter to
Chief Secretary Andhra Pradesh has advised the state
Government to desist from the move to revisit the power purchase agreements (PPAs) in the renewable energy sector, viewing that such steps would affect the investor's confidence and the country's renewable energy targets. Union Government’s letter comes in wake of the state government orders to cancel
all the infrastructure contracts awarded before April 1 by the erstwhile
Government .
AIPEF is of considered view that every state government has right to revisit the power purchase agreements in the larger public interest who has to bear the brunt of higher tariff on account of these faulty PPA’s. If the Government of India can amend the tender conditions in the interest of investor's, why the State Government can not amend PPA’s in public interest.
The recent decision of Government of India to allow difference in cost of Indian coal and imported coal by amending the terms and conditions of the contract to favour some big industrial houses is in order then why the reverse of same in public interest cannot be done by the AP Government.
All India Power Engineers Federation (AIPEF) opposes the Government of India’s directions to Andhra Pradesh Government not to reopen the power purchase agreements (PPA’s) in the renewable sector and supports the move of Andhra Pradesh Govt to revisit the one sided power purchase agreements
made in last few years at exorbitant tariff. AIPEF fully supports AP Government to revisit faulty PPA's. AIPEF is of the view that all State Governments should review all PPA's with exorbitant power rates favouring private houses. This review will be in larger interest of State and common consumers.
All India Power Engineers Federation (AIPEF) expresses its concern regarding the creation of a Joint venture of NTPC and Power Grid for the purpose of entering into the distribution business. The integrated State Electricity Boards (SEBs) were disintegrated and distribution and transmission were separated from generation. If a Generating company and a transmission company are to conduct distribution business this would amount to creation of an integrated
utility. Thus Government of India has finally recognized the critical need to reintegrate the utilities and demands reintegration of SEBs.However, such reintegration will yield greater and real benefits to the electricity consumers, if it is implemented at the level of the State utilities which face the consumers directly and are accountable to them.
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Heralding a major change in the power distribution sector of the country, two leading public sector utilities — NTPC and Power Grid Corporation of India — have formed a joint venture to set up National Electricity Distribution Company. The move could also hint at another round of power distribution reforms. This includes the separation of content and carriage businesses in power distribution — i.e the infrastructure builder for power supply and the supplier to consumers would be two separate companies. An agreement has been entered between Power Grid and NTPC on June 21 for formation of a JV company on 50:50 equity basis for setting up National Electricity Distribution Company Ltd (NEDCL). The main objective of the venture is to undertake the business for distribution of electricity in distribution circles in various states and Union Territories and other related activities. |
AIPEF appeals to the Govt. of India to withdraw the proposal to set up a Central Undertaking for entering into distribution. AIPEF appeals the State Governments to resist attempts to usurp the functions assigned to them by the Constitution of India.
Integration Of Power Utilities in States – Need of the Time
FACTORS IN FAVOR OF INTEGRATED STRUCTURE
i) Every state has one SLDC where the entire state is considered as one control area. This gives SLDC a clear advantage to manage load dispatch over the state as one entity. For example if there is load crash in one portion of state (due to rain, storm etc.) SLDC can order additional supply or loading in other areas of state to offset load crash, so that overall drawl by State remains without deviation.
ii) With one state Discom concept the state thermal and hydro generation can be optimally dispatched by SLDC in the most economic and optimum manner.
iii) Manpower and HR functions are performed more efficiently and with uniformity with one organization as opposed to multiple companies. In some states, like Karnataka the entire engineering manpower is under Transco, i.e. KPTCL while the Discoms draw their manpower requirement from KPTCL. IF there is only one integrated Company instead of 5 the problem is automatically
solved.
iv) In regulatory matters of state level, and dealing with SERC, it is practically effective with one Discom and generation and transmission combined. Creation of multiple units only complicates SERC issues.
v) Similarly, in dealings with CERC and APTEL etc. it is practically possible and justified considering the state as one entity in case of Rajasthan, for example, it is only on paper that the three Discoms are shown as separate parties.
vi) IN several states a separate coordination body has been created which is the controlling body of multiple Discoms. This body is the URJA VIKAS NIGAM.
In states like Gujarat, MP, Rajasthan the Urja Vikas Nigam has been
established it is opined that instead of having multiple companies in
distribution, generation and transmission controlled has Urja Vikas Nigam, It would be more effective, coordinated and economical to have one organization integrating the functions of distribution, generation and transmission as in case of KSEB Ltd and HPSEB Ltd.
AIPEF requests that GOI should introduce a separate section in National electricity Policy whereby the objective to integrate the state power sector is contained. The objective of combining generation, distribution and transmission under one integrated in one company is stated as a matter of policy for the States to adopt.
Even without a provision in National Electricity Policy the States are
empowered and at liberty to re structure their respective power utilities so as to achieve the objective of integrated operation since Electricity is a Concurrent subject.
MoP Govt of India should issue directions to states to restructure and integrate all unbundled power utilities of state in the larger interest of state for better coordination and better consumer service.
PRIVATISATION SPREE
Privatisation of biggest Govt Department Indian Railways to start now with clear motive of privatizing the profit making routes. After privatisation experiments success in Indian Railways Power, Coal, ONGC and other PSU's are on hit list. Not only loss making PSU'S Govt could sell stakes in profitable ones too. In Budget 2019 The government has set an ambitious target to raise a record Rs 1.05 lakh crore this fiscal by divesting its stake in both some loss-making and profitable Central public sector enterprises (CPSE), including Air India. This is 17% higher from the Rs 90,000-crore target set in the interim Budget presented on February 1.
In view of current macro-economic parameters, government would not only reinitiate the process of strategic disinvestment of Air India, but would offer more CPSEs for strategic participation by the private sector...the Government will undertake strategic sale of PSUs. The government will also continue to do consolidation of PSUs in the non-financial space as well.
Now NTPC,ONGC,GAIL & NTPC are on way of Privatisation
The government has identified the biggest energy companies such as Oil & Natural Gas Corp., Indian Oil Corp., NTPC Ltd. and GAIL India Ltd. as probable candidates for cutting its direct holding to below 51%.
We have to stand united against any such move in Power Sector and we will support other employees Federations of PSU's in their struggle against privatisation.
MAIN DEMANDS
a. Stop Privatisation / Franchisee and oppose any amendment in Electricity Act aimed at to destroy public sector and pave the path for privatisation.
b. Integrate all power utilities in states in form of SEB Ltd like KSEB Ltd and HPSEB Ltd.
c. Review all PPA's with IPP's having exorbitant electricity rates.
d. Implementation of Old Pension Scheme for all Power Engineers & Employees recruited after unbundling of SEB's.
e. Regular appointments on regular posts and do away with out sourcing / contractual appointments.
AIPEF will soon decide future course of action and mass awakening / mobilisation programme in coordination with National Coordination Committee Of Electricity Employees & Engineers (NCCOEEE). Need of the hour is to show our unity and strength to save Power Sector.
Be united. United we stand. Stop not till the goal is achieved.
Long Live Power Engineers Unity.
Jay Hind.
Shailendra Dubey
Chairman