{"id":39649,"date":"2023-07-14T12:51:45","date_gmt":"2023-07-14T07:21:45","guid":{"rendered":"https:\/\/plyinsight.com\/?p=39649"},"modified":"2023-07-14T12:51:45","modified_gmt":"2023-07-14T07:21:45","slug":"sc-directions-to-benefit-electricity-consumers","status":"publish","type":"post","link":"https:\/\/plyinsight.com\/hi\/sc-directions-to-benefit-electricity-consumers\/","title":{"rendered":"SC directions to benefit electricity consumers"},"content":{"rendered":"

All discussions on the power sector inevitably end up chastising distribution companies (discoms) for their errant behaviour \u2013 both with their suppliers and with their customers. This \u201cdiscom-bashing\u201d has been going on for well over three decades and ranges from commentaries on unacceptable transmission and distribution losses, irrational tariffs, corruption at various levels, poor customer service, suspicious accounting, to generally holding the power sector to ransom.<\/span><\/p>\n

It has to be recognised that some discoms (both private and state- owned) have managed to emerge out of the sectoral morass and delivered outstanding improvements. But they are more the exception than the norm. Overall, in spite of many schemes, the distribution sector still continues to be a drag on the economy.<\/span><\/strong><\/p>\n

It is also common knowledge that much of the ills attributed to discoms are the result of misguided and populist policies of political parties across the spectrum. Various \u201creform initiatives\u201d proposed by the Union power ministry over the decades have been stymied due to resistance from state governments and the unhelpful attitude of the discom unions. So, the power ministry keeps chipping away and tightening the noose with stricter compliance requirements. Some of these have helped, as is evident in the decreasing outstanding dues of discoms, some improvement in distribution efficiencies and the like.<\/span><\/p>\n

Into this complicated environment, the Supreme Court has now stepped in with its own set of structures and observations. As directed by the apex court, the Ministry of Power should evolve a mechanism such that once the first order is received from a state or Central Regulatory Commission; discoms should first make the payment to generating companies so that the burden of \u201ccarrying cost\u201d on the end consumers can be avoided.<\/span><\/p>\n

The judgment rules the fact that discoms are the root cause of massive financial stress across the power chain, thereby impacting the orderly growth of the economy. The effect of withholding the payment in view of multiple litigations results in an increase in carrying costs\/LPG, which then reflect in the aggregate revenue requirement of discoms and is ultimately passed on the end consumers as a tariff shock.<\/span><\/p>\n

The point is an interesting revelation during the proceedings. To a pointed query, the learned counsel for the discoms conceded the position that the prices at which the electricity is purchased from independent power producers is substantially lower than the power purchased from state generating companies. The Court noted this with a degree of concern.<\/span><\/p>\n

The key summary of most of the observations ultimately boils down to the Supreme Court insisting that the Union of India, through the Ministry of Power. This needs strict implementation; and to be more specific-the officials concerned need to be held accountable henceforth.<\/span><\/p>\n

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All discussions on the power sector inevitably end up chastising distribution companies (discoms) for their errant behaviour \u2013 both with their suppliers and with their customers. 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