Modi government plans to make power companies pay penalty for load-shedding

The Modi government is planning on penalising power distribution companies – also known as discoms, if they indulge in load shedding from the next financial year, Times of India has reported. The quantum of the penalty would be decided by the power regulatory authority present in every state.

As per power minister RK Singh, this proposal has been included in the Centre’s draft power policy which would soon be made accessible to the public for its input, following which a finalised document would be implemented from Financial Year 2019.

Under the draft, the government has also proposed that discoms have to bear the aggregate transmission and commercial losses exceeding 15 per cent.

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As per a Deccan Herald report, the draft amendment to the 2016 National tariff policy proposes that it would be mandatory for a power company to prove to the electricity regulatory commission that it has made medium to long-term power purchase agreements which would be enough for meeting the average requirement of its clients.

The amendment as per the report warns that, failing to prove the same would render the discom liable for getting its license revoked. The draft also proposes that power cuts not emanating out of technical failures and force majure conditions would be liable for a penalty, as deemed fit by state electricity regulatory commission (SERC).

Such a proposal by the Delhi government was also recently approved by LG Anil Baijal wherein power companies would need to pay Rs 100 per hour, after the first hour, to customers owing to power cuts.

Incidentally, it isn’t the only proposal made by the Modi government to try and make state service providers accountable for their actions.

We had reported how Railway Minister Piyush Goyal had warned zonal general managers about their promotions being hampered if they failed to arrest the chronic problem of train delays in their respective zones. The general managers were given a time up to 30 June to improve the situation.

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