india

Updated: Jun 29, 2019 08:43 IST

Minister of state for power and renewable energy RK Singh, a bureaucrat-turned-politician, spoke to Anisha Dutta about the Bharatiya Janata Party (BJP)-led central government’s plan to draft a new power tariff policy with the aim of reducing the price of electricity and safeguarding consumers’ rights, and other issues related to the sector. Edited excerpts:

Q: What is the 100-day agenda for the power sector? You have also formed a committee to draft a vision document...

We are looking at new reforms to focus on. We have already expanded access, now every village has been connected; we have also connected every house, except some which are left {in} states like Rajasthan and Chhattisgarh. and some houses in UP which were not willing to take connections because they were using illegal power. Apart from this, all houses are connected. We strengthened the distribution system through the Deen Dayal Gram Jyoti Yojana, and the transmission network. Now the reforms which we are bringing about will be to ensure 24x7 power supply in a sustainable manner.

That means DISCOMs {distribution companies} must supply {power} and must also be able to collect the money for the power {from consumers}. What I am saying is that any state government is free to give subsidy but we are advocating to give the subsidy through Direct Benefit Transfer because then the consumer will be a responsible consumer. You give him the money and if he consumes less, he will save money. And this is absolutely necessary looking at the state of groundwater because states give unrestricted free electricity to farmers and they tend to leave their pumps running. But when they realize they can save money by just sort of running the pump for the time it is necessary or providing only that much of water coverage to the field which is necessary, the ground water exploitation will come down and the DISCOMs’ health will also improve.

Q: What is the state of the power tariff policy?

That is due to go to the Cabinet for approval any day now. With about 2.7 crore consumers added in villages, demand is touching 185 GW whereas peak used to be about 170 GW. When I go around villages I see people using appliances like TVs, fridge, ACs. Demand will continue to rise. What we are saying is that we need to focus on consumer rights. What a consumer is obligated to pay should not be much beyond what the actual cost of supply is for a DISCOM. If a DISCOM is able to get power at say ~3/unit and the wheeling charges and network transmission cost about~1, then the average cost of supply is about ~4.50 depending upon the state. The individual consumer must not be asked to pay more than that. What we are saying is you can’t pass on all your losses, we have put this in the tariff policy.

The tariffs which you can pass on will not be more than 15% of the total.Another thing is we are also bringing in bundling, that means the generation company can bundle renewable energy with thermal and supply. This will reduce the price because RE {renewable energy} prices are cheaper. We are saying that the system does not exists for DISCOMs and GENCOs {generating companies}, the system exists for serving the people, hence consumer rights are important.

You can’t do load-shedding, you have to pay a penalty; if you delay in providing service, then there should be penalties. We are empowering the authority to write down the list of consumer rights and any violation of the rights will mean penalty to the DISCOMs. The authority will write down guidelines after discussing with the forum of regulators. It will be a dynamic thing, every year the regulators will decide the penalty rates.

Q: What is the state of the Kisan Urja Suraksha evam Utthaan Mahabhiyan (KUSUM) scheme for rural areas?

(The scheme aims to promote the use of solar energy by farmers).That has been approved by the cabinet; we will launch it in another 10-20 days.

The scheme is a game changer and will multiple farmers’ income. The farmer can use his barren land which is now currently lying fallow and set up a solar plant on that for 1 MW or so and we will buy that power through which he will get a huge income and if it is cultivable land then he can set it up on stilts and grow crop below. Apart from that, farmers currently are using diesel-powered irrigation systems which are expensive so under the DDGY scheme we have given money to the states for setting up separate feeders so that we are able to energize all tube wells. We are going to remove diesel from the farm sector by taking electricity to every field.

Electricity will be about 1/5th the price that he pays for diesel so his irrigation bill comes down by 90% ; the second thing is he virtually gets free irrigation because the centre sets up a solar plant and gives 30% cost while the state also gives 30% under KUSUM while 30% is given as loan; 10% has to be paid by him.

The fact that he needs to use it only 3-4 months during the cultivation season; he is also generating power in the remaining period which we will buy from him. That money can be used to pay the bank loan and irrigation virtually becomes free. We will launch this in 15-20 days and will be implemented over three years.

Q: Will groundwater not be an issue then?

That will be an issue, we will have to carry out education system for the farmers. Groundwater is going down and it’s a matter of great concern.

That is also the reason we are advocating DBT so that the wasteful use of power can be stopped. The incentives not to waste electricity will be there because whatever he does not use can be sold. The project will cost about ~1.46 lakh crore. And the Centre will provide an assistance of ~34,000 crore.

Q: You had planned to launch a new scheme for assisting DISCOMs. Will that be an extension of Ujwal DISCOM Assurance Yojana (UDAY)?

We are coming out with a scheme whereby we will help the states to reduce their losses. Under UDAY we laid down the trajectory of loss reduction. Today losses have come down from a high of 20% to about 18. 2% and now the aim is to take it to 15%. But we are going to come out with a new UDAY where will we also give financial assistance to reduce your losses by ensuring that the cost of power is recovered.