Energy sector technocrats representing some 1.5 million public sector powermen have opposed NITI Aayog's proposals, in its strategy paper, to privatise power distribution in urban areas and run a franchisee system in rural.

All India Power Engineers Federation (AIPEF) has said any move to privatise power distribution would meet resistance by power engineers and employees at all levels.

According to AIPEF chairman Shailendra Dubey, the NITI Aayog strategy paper had basically highlighted such points, which were part of Electricity (Amendment) Bills 2014 and 2018. These bills elapsed after they could not be passed in the Lok Sabha under the Narendra Modi-I regime.

In its paper, NITI Aayog has proposed privatisation of state distribution companies (discoms) and the use of a franchisee model to reduce AT&C (aggregate technical and commercial) losses in the domestic power sector.

The federal policy think tank, which replaced the erstwhile Planning Commission, has also recommended discoms may adopt a franchisee model for its retail business in rural areas and stipulate a minimum level of performance parameters, including the use of decentralised generation sources and storage systems for local reliability and resilience.

Meanwhile, the AIPEF has written to union power minister R K Singh seeking time for discussing issues facing the domestic power sector.

AIPEF has opined that ‘experiments’ of privatisation and franchisee models had failed across the country and under such circumstances, the Centre should discuss related issues with the power sector engineers so that a fruitful power policy could be framed. This would ensure quality and affordable power to consumers.

“The experiment of unbundling of state electricity boards has failed and the losses of discoms are increasing…unification is the need of hour to avoid unnecessary wasteful administrative expenditure going forward,” Dubey told Business Standard.

He claimed after unbundling of power generation and transmission, the new companies were burdened with billions of rupees in income tax, while the discoms accumulated huge amount of losses owing to lopsided power sector policies. “In the end, the consumers bear the brunt in the form of higher power tariffs,” he lamented.

He warned if the Centre attempted to take any ‘unilateral’ decision on the NITI Aayog’s recommendations related to the energy sector, then 1.5 million employees would be compelled to agitate.

Earlier, the AIPEF had even recommended setting up of a committee with representatives of all stakeholders including consumers and engineers/employees to review the impact of the legislation enacted in 2003 and the attempts for further amendment. The committee would examine the need to restore some features of the ‘tried and tested’ Electricity (Supply) Act 1948 after evaluating the consequences of unbundling of power sector assets, thus creating multiple organisations and resulting in needless and avoidable confusion, increase in costs and litigation, the Federation underlined.