Maharashtra Energy Minister Nitin Raut has slammed the Centre’s announcement to privatize the state power owned power distribution companies by introducing multiple supply licensees in the content segment based purely on market principles. He claimed it would make the consumers vulnerable to gaming strategies by generators, making electricity costlier and a luxury commodity for poor and middle class.
Raut was reacting to the draft bill proposing amendments to the Electricity Act to enable competition in power distribution and also by a statement by the union Minister of state for power RK Singh that the Centre will de-license the electricity distribution sector to end monopolies allowing any company to supply power in any area. Raut also criticized the Finance Minister Nirmala Sitharaman’s budget announcement to privatize the state-owned distribution companies.
“Corporate sharks would create a monopoly in power supply business as it had happened in UK and other western countries where power had become a highly expensive commodity for domestic consumers. However, farmers and people from low-income groups would be worst hit once the power distribution business was segregated into the carriage (distribution network) from the content (electricity supply business) in the power sector,’’ said Raut. He further noted that there would be a multiple supply licensees who by gaming generation (creating artificial scarcity by purposefully lowering the production of power) would hike the prices and would compel the consumers to purchase costly power.
Raut claimed that the BJP government was likely to amend the electricity bill deregulating the retail power business and would likely to dismantle the mechanism of providing cheap power to farmers, domestic consumers and economically weaker sections. “The consumers didn't have knowledge about the prevailing market rates of power and multiple choices. They would be subject to the tariff shocks due to the private suppliers. At the same time, they would not be protected by the regulator and would be left to the market mechanism manipulated by corporate sharks,’’ he claimed.
He said once it happened the cross-subsidies would be removed. The farmers and small-scale industries would have to purchase costly power which would make their business economically unviable.