Privatising power distribution: A hoax https://www.deccanherald.com/opinion/in-perspective/privatising-power-distribution-a-hoax-1031104.html Uttam Gupta, SEP 16 2021
A major plank of the Electricity (Amendment) Bill (EAB), 2021, is to de-license the electricity distribution business, bring in competition, and give the consumer power to choose her supplier (‘open access’).
What makes discoms weak? The states order them to sell electricity to poor households and farmers at a fraction of the cost of purchase and distribution, or even free. At the same time, using their monopoly position under the existing dispensation, they charge high tariffs on supplies to industries and businesses, which helps them trim the shortfall.
Now, if private players also enter the fray, offering lower tariff (as they don’t carry the baggage of low-paying customers, theft and inefficiencies), industries and businesses will shift to them, resulting in huge loss of revenue to discoms, even threatening their survival.
Shankar Sharma Comments: 17/9/21021
If private companies be allowed to enter the distribution business. after thenext 2-3 decades, there will be transformation of the sector, as happened in the case of telecom.
Will this be good for society? The answer should depend on who asks the
question and what is the background thinking?
There can be no doubt that keeping all the associated issues in objective consideration, the best option for the entire country is to encourage widespread usage of rooftop SPVs, even if it means financial assistance for a few more years. But one thing seems to be clear. Our society cannot afford to go on with the BAU scenario for long; because it is not sustainable from any angle.