Centre should bear discom losses, says ex-Power Secy

Patiala, April 25

EAS Sarma, former Power Secretary, in a letter written to the Punjab Chief Minister and Centre, said the Union Government should bear a portion of discom losses, instead of passing it on to consumers. Sarma has also urged the states to raise the concerns with the Ministry of Power over ‘unilateral diktats’ issued by the Centre that impose a huge cost burden on consumers.

VK Gupta , spokesperson of the All India Power Engineers Federation (AIPEF), said the Ministry of Power in its draft Electricity (Amendment) Rules, 2023, had asked the state governments to pass on the 50 per cent of the losses incurred by discoms to the consumers.

The Power Ministry has directed the state discoms to absorb electricity from centralised solar power generation plants, from which, the unit cost of electricity delivered at the consumer’s end is high due to the low capacity utilisation of large solar plants. As a result, the state electricity utilities are often forced to deny themselves the option to procure electricity from cheaper sources.

“Eighty per cent of the cost of electricity delivered by discoms is attributable to the cost of generation of electricity. The Centre’s approach to privatise electricity generation has resulted in the states having to enter into regressive power purchase agreements (PPAs) with private companies, leading to a sharp increase in the average cost of electricity generation. When some states tried to renegotiate the PPAs to reduce the costs, the Ministry of Power tried to prevent them from renegotiating the PPAs,” said Gupta.