Stop patronising power theft and bring down runaway revenue leakage in power distribution

Stop patronising power theft and bring down runaway revenue leakage in power distribution

In a disingenuous move, state power utilities are reportedly jacking up spot market power tariffs by up to 40 per cent for large industrial consumers seeking “open access” to the grid. But a highly distorted tariff structure (read: penal tariffs), with the express purpose of deterring cross-country power exchange via open access, is really no reform. The way ahead is for politicians to stop patronising power theft and bring down runaway revenue leakage in power distribution pan-India so as to have a proper market for power.
It would then make eminent sense for efficient producers to gainfully seek custom via open access to the line network, for a reasonable fee. And attempting shortcuts like steep open-access charges, never mind huge distribution losses of state power utilities, would be thoroughly suboptimal, and can short-circuit the system. The Electricity Act, 2003, was intended to bring in independent oversight put paid to politically mandated tariffs and gross populism in power.
But it has now been shown that state power regulators may not revise tariffs for years, to remain in the good books of the powers that be. And such a mindset needs prompt overhauling. The idea that power can be supplied gratis or dirt cheap with the right political patronage needs to be junked wholescale.
Yes, there is certainly a case for limited, budgeted subventions for power. But gross open-ended subsidies just make no sense. Such policies can bankrupt entire state treasuries and lead to environmental damage like falling water tables. Pacing reforms in the policy-challenged power sector is vital.
What’s required is regular disclosure of power utility results prior to implementing routine open access. A proper market can wait, pending basic power tariff reform.