Notwithstanding their stellar performance, the Eastern and Southern Power Distribution Companies (discoms) of Andhra Pradesh may have to prepare to face the vagaries of the market in the near future with little government support.
To be more precise, the discoms, like their counterparts in other States, will have to beat competition from private players to stay in the distribution business if the Electricity Amendment Bill (EAB), 2014 becomes an Act that completely changes the rules of the game laid down under the Electricity Act, 2003.
However, the discoms are opposing the move saying it amounted to privatising the sector and that it will be detrimental to consumers.
The A.P Electricity Regulatory Commission (APERC) Chairman Justice G. Bhavani Prasad has, in the Commission’s State Advisory Committee meeting held in the city two days back, hinted at the possibility of the discoms losing out to competitors if the retail supply business is opened up, which will happen only when the EAB gets the Parliamentary approval.
Competition can be from private companies, urban local bodies or other agencies but they have to fulfil the stipulated criteria. A higher official of the Energy Department told The Hindu that the Ministry of Power has intended to unbundle the power distribution sector into network and retail supply businesses with separate licensing provisions.
It is to make the distribution link of the power sector value chain viable by fostering competition.
The idea is to open content (sale of power) to competition at the mandal and district levels. In view of the complexity of the power sector, a low degree of maturity in the retail electricity markets and other tricky issues, segregation of distribution is not desirable under the present circumstances, the Energy Department official observed.
An official of the AP-SPDCL said the move to open up the retail supply business was being opposed by the APSEB Engineers’ Association and other internal stakeholders due to the difficulties associated with it and future repercussions.
“Basic services like power and water supply were the responsibility of governments in the pre-liberalization era but it is no longer the case. We have to brace for competition as it will become a reality one day or the other,” the discom official affirmed.
If EAB, 2014, becomes an Act, they have to outsmart private players
