AP Chambers suggests changes in draft Electricity rules-2022

Vijayawada: The AP Chambers of Commerce and Industry Federation (AP Chambers) submitted a representation to Union Minister for Power Raj Kumar Singh on the draft Electricity (Amendments) Rules, 2022 giving several suggestions on the draft rules.

The AP Chambers opines that the new provision in the Electricity (Amendment) Rules, 2022 will remove public as well as private monopolies in the power distribution sector. The competition in the power distribution sector will certainly improve the quality of services and also lead to price competition which is undoubtedly advantageous to face global competition in terms of boosting exports. The Chambers said that the cost of the service is not followed by Discoms at present as per CERC guidelines, which had led to abnormal tariff hikes in the recent past. Reforms in the power sector are inevitable at this juncture to provide good service to the consumers. Electricity is an essential item for every individual and its utility is one of the parameters for the economy. Amendment of the Act would resolve the problems to a greater extent.

The draft rules seek to allow distribution licensees to modify electricity prices on a monthly basis to recover their additional spending on fuel and power purchase, which will lead to frequent changes in electricity tariffs as in the case of petrol and diesel prices. The enterprises expect a stable and uninterrupted power to industries at a fixed rate over a long-term period in order to plan the cost of production. Unfortunately, the above provision will lead to frequent changes in the tariff and the unforeseen price fluctuations will impact the cost of production.

The Chambers suggested that the Fuel and Power Purchase Price Adjustment charges should not be calculated and billed to consumers automatically, but only after going through the regulatory approval process on an annual basis as true-up charges according to the formula prescribed by the State Commission.

The AP Chambers requested the Union government to consult all stakeholders including all types of consumers since there is a perception that privatising electricity supply would be detrimental to the interests of the consumers. The Chambers also suggested that the draft Electricity (Amendment) Rules, 2022, should be discussed with the States to solicit their support which will ensure smooth transition and implementation of the policy. The Chambers stressed that the Electricity (Amendment) Rules, 2022 should also ensure to clean up the system, reduce power transmission losses, reduce establishment costs and make it a corruption-free system to guarantee uninterrupted supply of power at affordable and competitive rates to the consumers.