Why trade unions in Kerala are opposing Centre’s power sector revamp scheme

Source: The post is based on the article “Why trade unions in Kerala are opposing Centre’s power sector revamp scheme”  published in Indian Express on 27th July 2023

What is the News?

The Kerala government is facing trouble over the Centre’s Revamped Distribution Sector Scheme (RDSS).

What is Revamped Distribution Sector Scheme(RDSS)?

Government of India has launched the Revamped Distribution Sector Scheme (RDSS) for the duration of 5 years i.e. from (FY 2021-22 to FY 2025-26).

Aim: To reduce the Aggregate Technical & Commercial (AT&C) losses to pan-India levels of 12-15% and Average Cost of Supply (ACS)-Average Revenue Realized(ARR) gap to zero by 2024-25.

Components: The Scheme has two major components: Part ‘A’ – Financial support for Prepaid Smart Metering & System Metering and upgradation of the Distribution Infrastructure and Part ‘B’ – Training & Capacity Building and other Enabling & Supporting Activities. 

– Financial assistance to DISCOMs is provided for upgradation of the Distribution Infrastructure and for Prepaid Smart Consumer Metering & System Metering based on meeting pre-qualifying criteria and achieving basic minimum benchmark in reforms.

– The smart meters are meant to facilitate the reduction of distribution losses and enable automatic measuring of energy consumption. 

– The installation of the pre-paid meters is to be done through the TOTEX (total expenditure, including capital expenditure and operational expenditure) model with public-private participation.

Why are organizations in Kerala opposing the RDSS project?

Trade unions are opposing the TOTEX model, in which a private firm installs and maintains smart meters. The private agency will recover the cost incurred in installments. The unions fear that the smart meter system will thus pave the way for the privatization of power distribution in the state.

What is the alternative suggested by the trade unions opposing the project?

Trade Unions opposing the TOTEX model claim that the state should manufacture smart meters using the technology developed by the central government institution Centre for Development of Advanced Computing (C-DAC) which is willing to share the know-how. This will help bring down the cost of the smart meters significantly.