States need to make their power supply systems more efficient in order for India to utilise the infrastructure it has set up, said Minister of State for Power and Renewable Energy RK Singh Friday at the bi-annual state power ministers’ conference. This includes improving losses of state-owned electricity distribution companies (discoms) through measures like setting up franchisees where the discoms will act as wholesalers of electricity to private providers, the minister said.
He added that states needed to step up and take stern measures against electricity theft, and, contrary to popular belief, locking up offenders would not make them lose votes in the next elections.
“Even if you lock people up for not paying their bills, people will still vote for you. It is wrong to think that if you do something for the welfare of the state and the country, that you will not get votes,” said Singh
He said “efficiency would prevail when citizens get choice of selecting their own discom,” adding that shifting the role of state-owned discoms and allowing other players to distribute to individual households would ensure “upfront” payment to discoms.
He added that discoms were “inefficient structures” and that the country could not increase jobs in the power industry “unless we open up the distribution sector and allow more companies to compete with each other”.
“It (state-owned discoms) is good with wholesale,” he said, adding that it was “difficult” for governments to operate retail systems. “Right to good service and right of choice are enshrined in the constitution,” Singh added.
The minister also stressed the need for states to repay dues to discoms, adding that state government departments owe Rs 47,000 crore to discoms.
He also rapped them for “overcharging” industrial consumers for power that they procured much cheaper.
“How can states get investments when you are charging Rs 8-9/unit to the industry?” he said, adding that their cost was much lower at Rs 3-4/unit.
“You are overcharging (consumers),” he said. Demand for electricity grew seven per cent in the first quarter of this financial year, and is expected to grow further, said the minister.
“Demand is going to triple, so we need investments,” he said, adding that states needed to value the “sanctity of contracts”. Referring to Andhra Pradesh’s decision to review its power purchase agreements (PPAs), he suggested the move leads to uncertainty and stalls foreign investments in this sector. “In one state, the sanctity of contracts had been violated…five ambassadors got in touch with me,” he said.
“Ease of doing business is necessary to attract investment…and sanctity of contracts is warranted for that,” he said.
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