Under new rules, discoms will pay for power cuts

The rules are the latest initiatives by the Union government to ensure a better deal for consumers

Under new rules, discoms will pay for power cuts

India has framed rules that would provide consumers access to the uninterrupted power supply and compensation from electricity distribution companies in case of any supply disruption.

The rules are the latest initiatives by the Union government to ensure a better deal for consumers. It is also aimed at making discoms, which continue to be plagued by issues such as low tariff collection, increase in power purchase costs, inadequate tariff hikes and subsidy disbursements, and mounting dues from government departments, accountable.

“We are placing the consumer at the centre," power and new and renewable energy minister Raj Kumar Singh told a press conference on Monday to announce framing of the Electricity (Rights of Consumers) Rules, 2020.

“The consumers have rights, and those rights need to be respected. We have provided for penalties in case these are not met," Singh said.

The minister underlined that following these rules is not optional for discoms.

“We are going to build it into the law that if you resort to gratuitous load-shedding, you have to pay a penalty and the penalty will be heavy. Disruption of supply on account of acts of God is acceptable. However, gratuitous load-shedding is not. So, if you have taken a licence to serve an area, you better serve it," Singh had said in an interview as reported by Mint on 24 November 2017.

The new rules come in the backdrop of the National Democratic Alliance (NDA) government readying a raft of reforms for the power sector including implementation of the direct benefit transfer scheme for more efficient targeting of power subsidies, promoting retail competition and instilling financial discipline at state-owned discoms.

“The commission (state electricity regulatory commissions) shall notify the standards of performance for the distribution licensees," the power ministry said on Monday. “Compensation is to be paid to consumers by the distribution licensees for violation of standards of performance," it said.

“The distribution licensee shall supply 24X7 power to all consumers. However, the commission may specify lower hours of supply for some categories of consumers such as agriculture," it said.

The new rules also call for a timely and simplified procedure for connection, timely modification of existing connection, and a robust grievance redressal mechanism.

“Distribution companies across the country are monopolies, whether government or private, and the consumer has no alternative. Therefore, the consumers’ rights needed to be laid down in rules and a system for enforcement of these rights be put in place," the ministry said, explaining the rationale behind the new rules.

The government is in the midst of preparing a 3 trillion electricity distribution reform programme to help cut losses and improve the efficiency of discoms. The scheme is aimed at helping discoms trim electricity losses to 12-15% and narrow the deficit between the purchase cost of power and the price at which it is supplied to ‘zero’ by March 2025.

The discoms incurred an aggregate loss of 85,000 crores in 2018-19, as per government data. The covid pandemic likely worsened this situation. Besides, India’s average aggregate technical and commercial loss is at 21.4%, one of the highest among the large energy-consuming economies.

“These rules emanate from the conviction that the power systems exist to serve the consumers and the consumers have rights to get the services and reliable, quality electricity," according to the power ministry.

Source: LiveMint