Discoms may be fined for unscheduled load-shedding

The Union Ministry of Power has unveiled a draft amendment to the National Tariff Policy, 2016, which proposes to introduce penalty against electricity distribution companies for unscheduled load-shedding without valid reasons.

“It shall be mandatory for the distribution company to show to the respective Electricity Regulatory Commission that they have tied up long term/medium term power purchase agreements to meet the annual average power requirement in their area of supply, failing which their licence shall be liable to be suspended. 24-hour supply of adequate and uninterrupted power may be ensured to all categories of consumers by March, 2019 or earlier”, says the draft amendment.

“In case of power cuts other than in force majeure conditions or technical faults an appropriate penalty, as determined by the state electricity regulator commission (SERC) shall be levied on the distribution company and credited to the account of the respective consumers. The quantum of penalty shall be laid down by the respective SERC through regulations,” says the draft.

The draft also emphasised on introducing pre-paid smart meter system where the power will be automatically cut off when the amount credited is exhausted.

It also proposes to reduce the cost of electricity units and increase the fixed monthly rentals in line with the two part tariff (fixed and variable) mechanism through which discoms pay power generators.

“In order to reflect the actual share of fixed cost in the revenue requirement of distribution licencees, there is need to enhance recovery through fixed charges”, it said.

The amendment also proposes that if the state government wanted to give subsidy to certain sections of consumers it should be done through direct benefit transfer (DBT) mechanism.

It also proposed for capping cross subsidies at 20% of the power supply cost and compute tariffs assuming aggregate technical and commercial losses of 15%.

The stakeholders will have time till June 20 to submit their comments for the proposed amendment. The Ministry officials hoping to introduce the bill in the monsoon session of Parliament.