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Thursday, 02 June 2016 05:29
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As badly conceived as Trai’s call-drop fines


Given the populist nature of most politicians, it is not surprising that in the same way Trai did with call drops, Delhi chief minister Arvind Kejriwal wants electricity distribution companies (discoms) to compensate consumers for deficiency in service even when it is not clear they are to blame. Based on his directions, the Delhi Electricity Regulatory Commission (DERC) has come up with regulations that impose a penalty of R50-100 per hour per consumer if certain problems are not rectified within a few hours. Logically, since the fault could lie with the generating companies (gencos), the transmission ones (transcos) or the discoms, all should share the penalty in proportion to their fault—Kejriwal has, however, steered clear of the gencos and transcos, possibly since some of them are owned by the central government. While the DERC order is clear no penalties are to be paid if the transcos are at fault, it is silent on the fault of the gencos. Which means that, in case a genco fails to deliver, as happened a few weeks ago when Delhi’s power peaked, the discoms are expected to immediately buy electricity from another source. While this may not always be possible, a related problem is that if the power costs too much, the DERC may not allow discoms to pass it on to the consumers, making them understandably reluctant to buy expensive power—indeed, with R30,000 crore owed to discoms, gencos routinely threaten to cut off even contracted electricity supplies.

It gets worse due to political patronage. With over 800 illegal colonies regularised a few years ago, most do not have enough space to construct grid stations or to lay new cables or put up electricity poles. An equally big challenge is paying for the sub-stations. Under the DERC rules, this has to be paid for by the builder—in this case, the government—so there is a severe shortage of infrastructure. Indeed, as a general rule, DERC admits it has been conservative in approving new capex schemes—so there is a very big problem relating to funding the modernisation of Delhi’s distribution network which needs to be addressed. It doesn’t help that with 70-80% of household without circuit breakers in their electricity connections or drawing much more than their sanctioned loads, the overloading is very high—once this fault travels to the discoms’ transformers, they malfunction; not surprisingly, the greatest outages happen in areas with the largest power thefts and the discoms have no power to enforce discipline here. Cable faults due to construction work are another huge problem and repairing this can take even a few days. Given how the Supreme Court dismissed the Trai’s call-drop order for not taking into account the ground realities—like the lack of spectrum and towers—this could also go the same way should the discoms take DERC to court.


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