Centre wants consumers to share losses of Discoms

HYDERABAD, APRIL 22: The Ministry of Power has asked State governments to pass on 50% of the losses incurred by Discoms to consumers. The Ministry released its draft Electricity (Amendment) Rules, 2023, by substituting two clauses in the Electricity Rules, 2005, and sought the comments of the States by May 11.

The Ministry incorporated the provision called “Framework for Financial Sustainability” in the draft Rules. This provision states that the gains/losses accrued to distribution licensee due to deviation from the approved Aggregate Technical and Commercial (AT&C) loss reduction trajectory shall be quantified based on the average power purchase cost and shared between the distribution licensee and consumers.

In case the Discoms earn profits, two-thirds of the gains shall be passed on to the consumers, and the rest shall be retained by the Discom. In the case of a loss, half of the loss shall be borne by the distribution licensee, and the other half shall be passed on to the consumers as tariff.

Whenever the Discoms raise loans or get funds from the Union government under various schemes, the clause for giving loans/funds is to reduce the AT&C losses. However, the Discoms have not been implementing the clause properly, and the Ministry of Power proposed to change the rules.

“All the prudent costs of power procurement incurred by Discoms for ensuring 24X7 power supply to consumers and meeting requirements as per the Resource Adequacy plan prepared under the Electricity (Amendment) Rules, 2022, shall be taken into account, provided that the procurement of power has been done in a transparent manner or tariff has been determined by the Appropriate Commission,” the draft Rules say.

The draft Rules also propose that the prudent costs incurred by the Discom for creating assets for the development and maintenance of the distribution system should also be passed on to the consumer. The asset should be procured in a competitive and transparent manner, and assets should be geo-tagged.

Action against officials

The draft Rules stated that the officials concerned would be liable for action if the demand for subsidy was not raised. “In case subsidy accounting and the raising bills for subsidy as well as payment thereof are not found in accordance with the Act or Rules or Regulations, the State Commission shall take appropriate action against the officers concerned for non-compliance as per the provisions of the Act,” the draft rules said.

“A quarterly report shall be issued by the State Commission for each distribution licensee, in its jurisdiction, giving findings whether demands for subsidy were raised by the distribution licensee in the relevant quarter based on accurate accounts of the energy consumed by the subsidised category and consumer category-wise per unit subsidy declared by the State government, the actual payment of subsidy in accordance with Section 65 of the Act, and the gap in subsidy due and paid as well as other relevant details,” the draft rules said.The draft Rules further proposed that the quarterly report by the State Commission shall be prepared within 45 days from the end date of the respective quarter.

-TNIE