Kerala opposes Centre’s move to de-license power distribution
Kerala has strongly opposed the move to de-license power distribution, stating that it scarcely is the way to achieve the objective of ensuring efficient and cost-effective electricity supply to the citizens.
In a March 15 letter to the Union Power Ministry setting down its policy opinion on the amendments planned in the Electricity Act, 2003, the State Government argued that the proposal to open up the distribution business — purportedly with the aim of giving consumers a wider choice of power suppliers — will imperil the ordinary electricity consumer if adequate safeguards are not in place.
Citing the Kerala State Electricity Board (KSEB) as a robust State-run model for efficient and cost-effective power distribution, the government pointed out that even in developed economies, multiple distribution companies (Discoms) have created ”complexities” for the smaller power consumers who constitute the bulk of the consumer population. ”Unless the reform is designed scrupulously, taking into account ground realities, the well-intended objective of ‘choice to consumers’ may not be fulfilled,” the letter noted.
Liberty for roadmaps
If the Centre indeed opts to pursue with the proposal in the draft Electricity (Amendment) Bill, 2021, the States should be given the liberty to draw up roadmaps for the introduction of multiple power distribution licensees and prescribe areas where they can operate, ”taking into account proper consumer mix, network adequacy and technology maturity,” the letter said.
In a February 5 note seeking comments on the draft from the States, the Union Power Ministry noted: ”It is proposed to de-license distribution.
