CHANDIGARH: All India Power Engineers Federation (AIPEF) has submitted its comments on the draft Electricity (Amendment) bill 2018 to the power ministry opposing the complete privatization of power distribution.

AIPEF has written to R K Singh Power Minister demanding that the revised draft along with the comments of stakeholders be again sent to Parliament’s Standing Committee on Energy and they should be given an opportunity to present its view point.

V K Gupta Spokesperson AIPEF said that the changes proposed in the Electricity Act, 2003 are a matter of serious concern as this will concentrate all powers in the hands of central government and will eventually lead to complete privatization of power distribution in India.

In the proposed amendment there will be separate supply licensees, Incumbent supply licensee and Intermediate Company to handle all power purchase agreements (PPAs). In present scenario every state pools the availability of power and implements merit order dispatch at state level so that energy requirement is met at least cost. With proposed setup how the Intermediary Company will implement merit order with multiple supply licensees is not known and it will be impossible task.  

Now Central Electricity Regulatory Commission (CERC) and State Electricity Regulatory Commissions (SERCs) are guided by tariff policy whereas in the draft amendment tariff policy will become mandatory making them subservient to policy dictates of central government.

The changes in the draft bill have been proposed that   supply licensees will be from private sector and the licensee will get assured profit by way of guaranteed return on capital employed and by stipulating that licensees will get their expenses covered without revenue gap. It can be said that the changes in tariff have been proposed to encourage privatization and ensure guaranteed profits to private parties.

The draft amendment proposes that the cross subsidy payable to different set of consumers within the distribution area will be reduced progressively and eliminated in a period of three years.  Further any subsidy payable to a consumer will be through the provision of direct benefit transfer and this proposal is practically unworkable and sure to fail.

The present chaos of surplus capacity and stranded thermal projects is due to non appraisal of projects by Central Electricity Authority (CEA) and power of CEA needs to be restored. The financial health of state Discos is already critical despite number of bailouts in last two decades and privatization of power distribution will make financial crisis even worse.