Power reforms will do more bad than good

In the name of power reforms, a lot of changes are being brought about in the structure and functioning of the power sector. But none is meant to provide any sort of relief to the consumers. On the other hand, such changes impose more and more burden on the consumers.

A Regulatory Commission is in place in Andhra Pradesh to monitor and regulate the functioning of the sector. But the public is at dark and no one knows the happenings in the sector. All of a sudden the Commission claims some thousands of crores having been lost in the process of carrying on its functioning and compels its consumers to pay extra, in the name of True Up charge, to compensate the loss.

It is not the first time loss is reported. When incurring loss becomes a routine affair is it not the responsibility of the Regulatory Commission to attend to it and set the things right to avoid further loss? Is it only authorised to simply pass on the loss to consumers?

It is believed that the loss is mainly due to the exorbitant cost at which power is purchased from private power generating firms. First of all, allowing private parties to produce power is the main culprit. Power generating units under the public sector are able to supply power at a much more competitive price.

To meet the growing demand it should have been thought of better equipping such units and bringing in more such units offering more facilities to them. Instead private parties are brought in and the worse is that Power Purchase Agreement (PPA) is done as per the dictates of the private parties. The quantum of power produced by them should be purchased at the cost quoted by them even if PSUs in the sector are able to produce and supply at a much lesser cost. Such unscientific, irrational and illogical agreements need to be scrapped at the earliest in the interest of the consumers.

As the consumers have no knowledge about the reason for the sector incurring loss and as they are not responsible for any such loss the Commission should immediately stop collecting True Up charge and adjust the amount collected so far in the future Bills.

In the background of the above woes sweeping changes are recommended, rather mandated, in the Power Reforms being promoted by the Center. They call for privatising the distribution and transmission sectors. In the name of simplification of categories, it recommends only two slabs: 1-75 and the rest. The cost suggested is too high that even consumers from high middle class may find it unbearable. It suggests charging a huge amount in the name of caution deposit even for a small increase in the average consumption. Calculation is likely to be done in the peak summer, when the consumption will be generally on the higher side.

The suggestion to offer the consumers to choose their distribution company looks to be a benevolent act but in reality it is going to add to further woes. It also suggests a 'Prepaid' system introduced in this sector.

Such reforms will have far-reaching effects plunging the consumers in further crises.

It is for the political parties to prove their people oriented character. The ruling party should say firmly 'no' to the Center and if it fails to do so it is for the opposition parties to move a resolution opposing such reforms.

- AG Rajmohan, Anantapur