Consumers should be free to choose their power distributor
Anti-corruption activist Arvind Kejriwal’s recent campaign against power tariff increases by distribution companies in Delhi raises many valid issues, but the manner in which he has chosen to register his protests is unlikely to further that cause beyond a point. Instead, the campaign is likely to get embroiled in avoidable controversies, leading even to its derailment. In the first round of his movement, Mr Kejriwal made a bonfire of electricity bills that several consumers of the distribution companies believe are inflated. That was an acceptable form of protest, even though its efficacy in addressing their grievances within the current system remained doubtful. That realisation perhaps goaded Mr Kejriwal to escalate the campaign, using direct-action methods — illegally reconnecting supply lines to homes that were denied electricity for either power theft or non-payment of dues. Whatever be the provocation, these are methods against which the law of the land should be enforced.
Yet, the issues of accountability for electricity bills that Mr Kejriwal’s movement has raised are valid and need to be resolved. Since the privatisation of power distribution in Delhi about a decade ago, the overall electricity situation has improved. Power supplies in the capital have stabilised and the distribution companies strengthened the supply network to reduce the transmission losses from a high of around 55-60 per cent to less than 20 per cent. This, along with other efficiency gains, resulted in significant improvements in the revenue flows of the distribution companies. However, the distribution companies claimed a much higher increase in their power purchase cost in this period and demanded a tariff increase. Mr Kejriwal has alleged that the electricity regulator had initially recommended a 23 per cent reduction in tariff, but this report was not accepted by Delhi Chief Minister Sheila Dikshit. Some time later, the regulator, under a new chairman, submitted a report that recommended a tariff increase. In the last one year or so, power tariff in the capital has gone up by around 50 per cent, even as complaints over faulty power meters and inflated bills have risen. Amid claims and counterclaims over the justifiability of such a steep tariff hike, and with Ms Dikshit distancing herself from the issues raised, consumers are left in the lurch.
Nor is there any choice for consumers to opt for a new distributor in case they feel their current provider is not addressing their legitimate concerns. The Electricity Act of 2003 had mandated that consumers eventually would have the option of “open access” to a distributor of their choice. Almost a decade later, consumers are yet to benefit from that mandate. Only those with a demand of 1 Mw and above can seek the “open access” facility; millions of small consumers are still at the mercy of their distribution companies. Privatisation has so far created private distribution monopolies, with no real competition. The day domestic consumers are able to buy their power from a distribution company of their choice, and not remain tied to the monopoly supplier in their area, campaigns such as those launched by Mr Kejriwal will become largely redundant. That will count as real reform in the power sector, directly benefiting the consumer.
The Reserve Bank of India, in its review of monetary policy for the second quarter of the financial year 2012-13, has resisted calls to cut the ...