Proposed Delicensing of Discoms Gets Mixed Reaction in WB

The proposed move by the Centre on delicensing power distribution business to induce competition has evoked mixed reaction. A discom official said it will impact the small consumers adversely and benefit the bulk users.

Former West Bengal State Electricity Regulatory Commission chairman R N Sen on the other hand welcomed the reform mooted by the Centre in Electricity Bill (Amendment), 2021 stating it will be pro-consumers.

However, implementation methodology will be crucial for its success, he said.

A senior West Bengal government official said the authorities will react after the meeting of the union power ministry with state power secretaries and top officers of the discoms on Wednesday where the proposed amendments to the Electricity Act 2003 will be discussed.

But he expressed apprehension that the Centre may hijack the power vested on the states by the Act through the amendments.

The financial losses of state-run distribution licensees jumped 83 per cent to Rs 61,360 crore in FY19.

The delicensing of power distribution is expected to be a key reform as it aims to provide more choices to consumers by allowing other operators to run distribution companies without any restriction in a bid to induce higher efficiency in the sector.

The Bill proposes that state governments create a universal service obligation fund in which any surplus with any operator on account of cross subsidy or cross subsidy surcharge or additional surcharge will be deposited,” Sen said.

The major challenge will be accounting and sharing of AT&C losses and quality of service to the consumers of rival operators, he added.

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