The Telangana government has ruled out implementing franchisee system in power sector proposed as part of a larger privatisation move in distribution companies (DISCOMS) in the The Electricity Act 2003 (Amendment) Bill
The government informed a video conference organised by Union Minister for Power Raj Kumar Singh with chairmen and managing directors of DISCOMS on Wednesday that the State Assembly had already adopted a resolution opposing the Bill and, therefore, the government is committed to it.
The conference discussed the components of the Bill like fixing meters to agricultural pumpsets, franchisees in DISCOMS, appointment of Member (Law) in electricity regulatory commissions, increasing the strength of members in electricity appellate tribunals, increasing the usage of renewable energy sources and Renewable Power Purchase Obligation (RPPO).
It was attended by Telangana Transco and Genco Chairman and Managing Director D. Prabhakar Rao, Joint Managing Director C. Srinivas Rao and chairmen and managing directors of both DISCOMS of the State.
Mr. Singh emphasised at the meeting that the DISCOMS will have to follow power sector reforms proposed under the amendment Act to become financially viable. Franchisees system in DISCOMS is the best solution forward, sources said.
The representatives of the State replied that the government had already expressed its view on the amendment Act through the resolution in the Assembly.
But, Mr. Singh insisted amendments to the 2003 Central Act are inevitable for the development of the sector. He asked officials to take this to the notice of the government.
When Mr. Singh emphasised that the DISCOMS were required to meet the targeted 19% RPPO of the total installed capacity as per the amendment Act, the officials of Telangana said the decision on RPPO should be left to State governments. Mr. Singh had warned that penalty would be imposed on State governments if the targets are not achieved.
Chief Minister K. Chandrasekhar Rao had earlier written a letter to Prime Minister Narendra Modi opposing the Bill saying, if adopted, the State government would have to fix meters to 26 lakh agricultural pumpsets. The government will require ₹750 crore to purchase the meters. Under the new law, industrialists would be given open access to purchase power which would push DISCOMS deep into losses as there could be no cross subsidy in power sector.
The Bill would facilitate the Central government to appoint State Electricity Regulatory Commissions with members of its choice. The Load Despatch Centre too would be managed by the Centre. These provisions were nothing but taking away the rights of States. The Bill is against the federal spirit. He also said the Centre was not considering hydel power generated at Srisailam and Nagarjunasagar projects as renewable energy and at the same time it wants to insist with States to purchase renewable energy from power plants in north which are loss making.
If the States did not purchase power from them, they will be liable to pay a fine of 50 paise to ₹2 a unit of power not purchased from them. If the States purchased, their own power plants would fold up.
