High penalty, licence renewal for discoms in electricity bill

High penalty, licence renewal for discoms in electricity bill
27/01/2018 , by , in ALLIED

The Electricity Amendment Bill will be pushed for passage in the budget session of Parliament which would provide for stringent provisions like higher penalty for unscheduled power cuts and renewal of licences for discoms every five years. At present, discoms get the licence for lifetime and there is provision of meagre penalty of Rs 1,000 for unscheduled power cuts by them which was rarely imposed by any power regulator so far. “There will be a provision of renewal of licence for discoms every five years, so that the regulator can see whether distribution company has tied up for enough power. The licences will be renewed every five years,” Power Minister R K Singh told reporters on the sidelines of a conference on e-mobility. The minister also said that time taken for providing an electricity connection to a consumer would also be reduced to one week from existing one month to increase the consumption of power. He said, “The provision for higher penalty would come into force from April 1, 2019. We will make it stringent so that it pinches the discoms.”

He also spoke about giving subsidy to targeted consumers through direct benefit transfer for which necessary changes would be made in the law. “The tariff is a concern. The tariff policy provides for 20 per cent cross subsidy (difference between highest and lowest tariff). But nobody is following it. In fact I am changing the tariff policy and do away with cross subsidy. The cross subsidy in some cases is 100 per cent.” Doing away with the cross subsidy would bring down the tariff of industrial and commercial consumers who pay more to subsidise power to other consumers like domestic households and farmers. “It is totally against the law to ask one consumer to subsidise other consumers. If government wants to subsidise somebody then government should do it through direct benefit transfer (DBT). We are not going to allow a situation where you charge Rs 11 per unit.”

The minister was of the view that charging Rs 11 per unit from commercial and industrial consumers is holding back the country and its Make in India initiative. The Electricity Amendment Bill also provides for segregating the distribution network business and the electricity supply business. This will enable power consumers to choose their service providers as they do for telecom services.


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