Missing link in power sector reform–the economic times

Clipped from: https://economictimes.indiatimes.com/blogs/et-editorials/missing-link-in-power-sector-reform/ET Edit

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The budget rolled out a revamped, reforms-based and results-linked power distribution scheme, with an outlay of over Rs 3 lakh crore, over the next five years. The new scheme would provide assistance to the distribution companies, or discoms, for infrastructure creation. However, while prepaid smart meters would make perfect sense to stamp out routine revenue leakage and outright theft, opting for feeder separation for agricultural and non-agricultural connections nationally may not be such a good idea. Such hiving-off may have made sense back in the 1990s, but the availability of reliable inexpensive digital meters makes feeder separation quite redundant.

Also, currently, with large solar power capacity functional and slated to be 60 GW next year, what’s surely required is better integration of renewable energy into the electricity grid and not so much differentiation between farm and non-farm usage. That will call for capacity creation in grid operations and storage of power. Smart, prepaid metering would allow targeting of subsidy, on par with direct benefit transfers (DBT) strongly endorsed by the Finance Commission, and, hence, put paid to needless politicisation of power tariffs. Reckless giveaways and gross, unbudgeted subsidies in power are totally unwarranted and have, indeed, precipitated a severe crisis in the vexed power sector.

Discoms do need to step up metering of individual household units in a residential building that hosts multiple households as tenants but has a single meter for the building as a whole. Lack of metering should not deny the poor the subsidy meant for them. The move to upgrade systems should reduce ohmic losses in distribution with better transformers, series capacitors and automatic voltage boosters.

This piece appeared as an editorial opinion in the print edition of The Economic Times.

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