{"id":30524,"date":"2018-10-26T16:34:57","date_gmt":"2018-10-26T11:04:57","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=30524"},"modified":"2018-10-26T16:34:57","modified_gmt":"2018-10-26T11:04:57","slug":"no-power-of-choice-for-consumers","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/no-power-of-choice-for-consumers\/","title":{"rendered":"No \u2018power\u2019 of choice for consumers"},"content":{"rendered":"<p><a href=\"http:\/\/www.thehindu.com\/todays-paper\/tp-business\/no-power-of-choice-for-consumers\/article23288783.ece\"><strong>No \u2018power\u2019 of choice for consumers<\/strong><\/a><\/p>\n<p><strong>Context<\/strong><\/p>\n<p>Monopoly in power supply<\/p>\n<p><strong>The issue<\/strong><\/p>\n<p>In the auctions, where the companies who offer to sell electricity at the least prices are the winners, companies quotewell under Rs. 3 a unit of electricity in some auctions<\/p>\n<ul>\n<li>But consumer is paying more than Rs. 6 per unit and the factories pay even more upto Rs.12 even.<\/li>\n<\/ul>\n<p><strong>The question<\/strong><\/p>\n<p>Why are they not passing on the benefit to the consumers?<\/p>\n<p><strong>TheState Monopoly<\/strong><\/p>\n<ul>\n<li><strong>Customers pay for State\u2019s inefficiencies:<\/strong> State governments, through the electricity distribution companies (discoms) owned by them, are still a monopoly, and exhibit monopolistic tendencies \u2014 their instinct is to make their customers pay for their inefficiencies<\/li>\n<li><strong>Controlling direct business with the suppliers:<\/strong> A large consumer of power can directly purchase power from a supplier, by-passing over the State discom but this has proven difficult as the owner of the discom, viz., the State government, has control over such direct transactions<\/li>\n<li><strong>Control via State Load Dispatch Centre:<\/strong> State governments use the respective State Load Dispatch Centre (which routes the power) as the instrument of control<\/li>\n<\/ul>\n<p><strong>Misuse of Section 11 of the Electricity Act<\/strong>:<\/p>\n<ul>\n<li>This section allows them to force a power producer in that State not to supply outside the borders<\/li>\n<li>The provision was meant for use in rare circumstances of emergency-like power shortage, but many States have taken liberties with the interpretation.<\/li>\n<\/ul>\n<p><strong>Controlling the Free Market or the Open Access (OA) via Open Access Charges<\/strong><\/p>\n<p><strong>Increasing Cross-subsidy surcharge (CSS)<\/strong><\/p>\n<ul>\n<li>This is a surcharge that a discom levies on a customer for meeting the costs of free or subsidised power to some sections of the society.<\/li>\n<li>Ideally, the costs of such subsidies should come from the State government\u2019s own funds, but other customers are made to pay for it.<\/li>\n<li>The Electricity Act allows CSS, but the idea clearly was that the charge shall be progressively reduced and eliminated but instead, the CSS is only increasing<\/li>\n<\/ul>\n<p><strong>Additional Surcharge<\/strong><\/p>\n<ul>\n<li>This is meant to compensate discoms for the fixed cost of their long-term contracted capacity, which is stranded as a result of consumers moving to Open Access (OA)<\/li>\n<li>Customers leaving them has adverse financial implications, at a time when they are hard up on cash<\/li>\n<\/ul>\n<p><strong>National Tariff Policy of 2016against the CSS<\/strong><\/p>\n<p>In Section 8.3, it says \u201cdirect subsidy is a better way to support the poorer categories of consumers than the mechanism of cross subsidizing the tariff across the board.<\/p>\n<p><strong>Other Factors<\/strong><\/p>\n<ul>\n<li><strong>Centre-State mismatch<\/strong><\/li>\n<\/ul>\n<p>While the Centre wants a vibrant, 24-by-7 market, the States are more concerned about their immediate finances and electoral issues.<\/p>\n<ul>\n<li><strong>Draft of the New Electricity act is gathering dust<\/strong><\/li>\n<\/ul>\n<p>On top of all this is the proposed New Electricity Act which proposes to separate \u201ccarrier and content\u201d, meaning the transmission lines will be like tolled highways for use by anybody, while the power itself could be supplied by anybody, so that the consumer will have a choice to switch seamlessly between suppliers<\/p>\n","protected":false},"excerpt":{"rendered":"<p>No \u2018power\u2019 of choice for consumers Context Monopoly in power supply The issue In the auctions, where the companies who offer to sell electricity at the least prices are the winners, companies quotewell under Rs. 3 a unit of electricity in some auctions But consumer is paying more than Rs. 6 per unit and the&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/no-power-of-choice-for-consumers\/\">Continue reading <span class=\"screen-reader-text\">No \u2018power\u2019 of choice for consumers<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-30524","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704767995},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/30524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=30524"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/30524\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=30524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=30524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=30524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}