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Home News Power Sector News AIPEF and NCCOEEE oppose Electricty (ammendment) Bill 2014

AIPEF and NCCOEEE oppose Electricty (ammendment) Bill 2014

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NCCOEEEAll India Power Engineers Federation (AIPEF) has decided to oppose the Electricity (Amendment) bill 2014 and a written submission will be made before stranding committee on energy to whom the bill has been referred by the LoK Sabha Speaker.

Dr Kirit Somaiya, Chairman of Parliamentary Standing Committee on Energy has invited representations on amendment bill. AIPEF will submit it's representation before standing committee at an earliest.

AIPEF is also preparing for nationwide agitation for which action programme will be finalised in NCCOEEE meeting scheduled to be held in Delhi on January 25. Terming the amendment bill as anti-people AIPEF has demanded it's immediate withdrawl. AIPEF has requested Central Govt for detailed deliberation with power employees & consumers before going for such a major amendment.

The concept of multiple supply licensees has been proposed in the bill by segregating the carriage from content in the distribution sector and determination of tariff based on market principles, while continuing with the distribution network as a regulated activity.

Based on the experience gained over the years splitting of power distribution has not yielded desired returns but the Government has introduced The Electricity (amendment ) bill in Parliament, if passed would allow multiple power suppliers which in turn will lead to total privatization of power supply in country. This is aimed at to facilitate private houses that will get creamy profit earning areas while common consumer will be left on the mercy of loss making Govt utility and face power shedding.

It is not clear that how this amendment will tackle the problems of state utility losses , rising tariffs and fuel availability which are the main challenges being faced by power sector of India. It seems that the Bill has been introduced just to facilitate corporate houses. Multiple supply licensees at the same area of operation is aimed at retail competition thus to tide over the impractical proposal of multiple distribution licensees existing in Act 2003.

Even though there is a dream of improving quality and reducing cost through market competition, the reality is different. The experience and effect of market power in a scarce market has not been considered in formulating the proposal. Also there is no successful example for these types of retail competitions even in developed countries.

As India is energy starved nation, reducing price of power through competition is impractical. The multiple licensee system will help only "cherry picking" and the deterioration of the incumbent public sector licensee, which will be the only responsible for supplying electricity to the unprivileged common.
This simply means nationalizing the losses and privatizing the profits.

Competition is possible only in a situation of surplus, not scarcity of electricity, which the country was facing. At present nearly 40% population of country does not have access to power as they cannot afford power even at existing rates. Therefore giving multiple licenses of supply will lead to chaos, heavy losses of Discoms, endless litigations and sky level tariff hike for common people.

This is an extremely serious issue given the financial dependence of state distribution companies on the revenue from high end consumers.

The proposed system of separating out supply from wires business involves a foolproof and dispute free system of energy accounting and loss determination. Energy accounting and loss determination itself would make the proposed system unmanageable and full of disputes. An elaborate and computerized energy accounting and loss accounting systems are nowhere in existence and without these the commercial aspects of energy supply simply cannot be settled.

Source - Meri News


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