AIPEF wants discussion on Electricity Amendment Bill
The All-India Power Engineers Federation (AIPEF) in a letter to SK Sinha, State Minister For Power, New and Renewable Energy, has demanded that Electricity (Amendment) Bill 2014 which envisages segregation of carriage and content should not be rushed in winter session of Parliament before discussion with power engineers as this has far reaching implications not only for the industry, but also the consumer.
The Amendment Bill recognises the need for a government licensee so that the loss-making sector of the supply industry can be served by the tax payer’s company, while the private licensees cream of the high-paying sections. The burden of serving the unviable PPA would be the responsibility of the intermediary company, while exempting the private licensee. This would ensure that the intermediate company is born and survives as a sick unit.
The provision of Fixed Cost payment enforced by power purchase agreements (PPAs) has proved not only very costly, but also counter-productive. State after state are annually paying private independent power producers thousands of crores of rupees only as capacity charges, even when not a single unit is consumed by the state. There is a need to re-examine the PPAs and ensure that such payments are not made.
Even the present open access has worsened the financial health of power companies and made it difficult for Discoms to serve the agricultural and domestic consumers. To overcome this, in any states, additional surcharge has been levied, making electricity more costly.
VK Gupta, spokesperson of AIPEF, said a misguided analogy was made with consumer choice in mobile phones. Whereas the mobile tariff is based on cost to serve and the tariff is the same of all class of consumers that is not applicable for the electricity supply industry. Also mobile is a wireless system, whereas electricity is a wired system.
“Experience has shown that as consequence of removal of approval by CEA has resulted in unplanned growth and capacity addition, particularly the thermal capacity by the private sector has accentuated the already acute hydro-thermal mix of generation. This has a steep decline in the thermal PLF resulting in stressed assets. In addition, the State Electricity Boards have been forced to back down and even shut down their stations to provide load against load guarantees given in the PPAs through regressive deemed generation clauses”, Gupta said.
The creation of multiple companies in a state has not improved the service, but instead it has added to the overhead costs and lack of clear policy for the states as a whole. Partial measures like UDAY only reduce the intensity of the financial and technical crisis but do not resolve it. There is a need for a serious introspection and course correction after reviewing the success or failure of the Electricity Act 2003.
Source: tribuneindia
