R.K. Singh Demolishes ‘Canards’ Against Power Reforms At Presser

At a virtual press conference today, Power Minister R.K. Singh launched a scathing broadside against what he described as the ‘canards’ being spread by vested interests to delay or block the passage of key power reforms, proposed in the upcoming Electricity (Amendment) Bill, 2020. Getting down to the theme straightaway, Mr Singh highlighted how India, which made a pledge at COP21 to ensure 40 percent of its generation capacity would be renewable energy by 2040, has already reached a level of 37 percent renewable energy share in capacity. He expressed the hope that India will meet its 2030 commitment by 2030 itself. India’s RE sector was the fastest growing in the world, and by 2030, generation from non-fossil fuel sources could be over 50 percent in India, he said.

On the background for the proposed amendments to the electricity act, the minister shared a figure of Rs 94,000 crores owed to multi state generation firms. Dues payable by state government departments were at Rs 64,000 crores, as of March  31,2020.

While the majority of discoms make losses, in some cases, losses are as high as 41 percent of costs. The minister stressed that this is simply unsustainable. Moving to the ‘canards, rumours and absolute bunkum’ as he described, it, Mr Singh listed  three primary issues.

First, the narrative that the  central government is taking over the appointment of members and chairpersons of State Power Regulators (SERC’s) . Explaining the present status quo, he described how selection for members and chairperson of SERC is done by a 3 member committee headed by a retired high court judge, with one member from the centre and one from state government. Every time a vacancy arises this commitee is constituted afresh. This, he pointed out was leading to delays,in some cases more than a year or even two years , during which time the relevant SERC was hamstrung. All stakeholders had to wait for orders in their cases, leading to frustration and real business losses for many firms. ” We felt this needed to be changed. The proposed amendment we circulated has a provision thereby we are saying that instead of multiplicity of selection panels (30-40 commitees), we have a standing committee headed by a sitting judge of the Supreme Court. With equal number of members (2 each ) from the central and state government.

The number and proportion remains the same at 2 each. Their state government will continue to have a say. The other input we have received and being considered is where we have permanent standing committees statewise for appointments, headed by a state HC judge. So you don’t have to constitute committee repeatedly”

The second issue deserving debunking by Mr Singh is the payment of subsidies. The sensitive issue has been mentioned by multiple state governments, notably West Bengal, Tamil Nadu and more, to raise resistance to the proposed amendments. Mr Singh referred to the rumours being spread that the change could see consumers seeing their connections cut, due to non payment of subsidy. Or delays in subsidy payment. This was completely incorrect, he asserted. “First of all  the state government has to release the subsidy in advance as per section 65 of the existing act. Nonetheless, what we have provided for, is that the subsidy will be given in the account of the consumer in the discom. Every month. We have also provided, that in case state govt delays in giving subsidy, the consumer will not get disconnected. So some state government have been briefed wrongly”, he said.

The third issue worth highlighting according to Mr Singh was that the proposed changes will take away the power of state governments to fix tariffs. He rubbished the claims, pointing out that tariffs in any case are supposed to be set by the SERC’s, and in some cases, the CERC. Thus, there is no such attack on state government powers at all.

Referring to the status in many states today, Mr Singh highlighted how issues like power theft, unpaid subsidies to discoms, and dues from state departments have actually contributed to  a higher power cost for consumers, and loss making discoms. Discoms strapped for funds end up curtailing power purchases, the brunt of which is borne consumers without a “voice”, in rural areas. “Our effort is to bring the consumer to the centre of the the system, to be served”. To a question on the impact on prices, he stressed that long term prices will come down for all stakeholders, especially consumers, as the stress on reducing losses, payments on time by state departments, subsidies by state government, and the better accounting that will follow will ensure a much more efficient Discom ecosytem.

On a question from SaurEnergy regarding the continued sanction for new coal power plants, even when he hiself admitted we have a power surplus, Mr Singh replied that almost 20 odd coal plants have been retired in the past 5-6 years. “Another 49 plants will be retired gradually in the next 3-4 years”, he added.

“We are undertaking the energy transition faster than any other country.  But at the same time, it is also essential for us to make sure we meet our requirements for growth. So enough power will be available for all”. he added.

Responding to a question on the need for an enforcement authority, highlighted as unnecessary by the West Bengal Chief Minister Mamta Banerjee among others, Mr Singh highlighted the risks to the country’s business climate from the Andhra Pradesh example. “We have 87, 000 MW of RE capacity, with 34,000MW under installation. All the developers are funded by global investors, be it pension funds, development institutions, and other sources of private capital. After the AP issue,  Ministers,  ambassadors from many countries told me that they considered their investments at risk. That is unacceptable”.

“One thing we must remember, unless you have sanctity of contact, you cannot have a thriving business, economy. It is the foundation on which investments come”

On anther issue flagged by Mamta Banerjee, Mr Singh also expressed amazement at the protest against the provision for RPO (Renewable Purchase Obligations) in the bill. “The whole world is worried about the environment, about sea level rise, about cutting down on fossil fuels, and West Bengal, a coastal state is not?”  he responded.

Responding to SaurEnergy on another question regarding the passage of the bill in the upcoming session of parliament, Mr Singh expressed the hope that it will happen, promising that he was personally making every effort to ensure it does. From writing personally to state chief ministers to other relevant stakeholders, he highlighted how the bill could make a massive impact on the sector, at a time when its strategic importance has already been acknowledged.