AIPEF FIRST TO FILE PETITION IN APEX COURT Dt:24-05-2016

Sasan: State goes to SC against APTEL decision

Sasan: State goes to SC against APTEL decision ... Bhopal: The state government has moved theSupreme Court ... have made an application for stay on orders of the APTEL," principal secretary, power ICP Keshari told TOI.


News on Reliance's SASAN Project in UT Independent 16th -31at May 2016 Dt:18-05-2016

COVER STORY ON RELIANCE SASAN IN U T INDEPENDENT




POWER TARIFF SCAM - SIN OF PVT CORPORATES CLOSE TO POLITICAL BOSSES Dt:18-05-2016

Power Tariff Scam Gets Bigger at Rs 50,000 crore

The dimension of the scam relating to inflation of power tariffs by, among other things, over-invoicing imported coal has become considerably bigger. It has now come to light that electricity generating companies are seeking to obtain compensatory tariffs from regulators. In addition, particular firms in the Adani and Essar Groups, have allegedly over-invoiced imports of equipment. The total size of the scam is currently estimated at Rs 50,000 crore, if not more.
The author would like to acknowledge Abir Dasgupta for writing and research assistance.
The scale and scope of the scandal relating to the fraudulent inflation of power tariffs by over-invoicing coal imported from Indonesia, and passing on the costs to the consumer has acquired new dimensions (Guha Thakurta and Malik 2016). Over and above the investigations that are being carried out by the Directorate of Revenue Intelligence (DRI) in the Ministry of Finance on 40-odd companies for allegedly over-invoicing coal imported from Indonesia to the tune of Rs 29,000 crore, there have been certain unrelated developments.
It is now being claimed that power generating companies are attempting to make illicit gains through “compensatory tariffs” awarded by electricity regulators. On top of this, firms in the Adani and Essar Groups, have been accused of over-invoicing imported power plant equipment.
The cumulative size of this scam that has led to higher electricity tariffs is currently estimated at over Rs 50,000 crore and could rise further. Among the private and public sector companies that have allegedly benefitted illegally are firms in the Adani, Essar, and Anil Dhirubhai Ambani Groups, as well as the National Thermal Power Corporation and the Tamil Nadu Electricity Board. One of the persons being sought to be indicted in the scam is the brother of Gautam Adani, who is known to be close to Prime Minister Narendra Modi.
On 31 March 2016, a “general alert” was issued by the DRI to some 50 customs establishments across the country, directing them to investigate all imports of coal from Indonesia. Why was this done?
The alert document mentions that imported coal was being systematically over-invoiced and that this illegal practice was not just rampant but continues unabated. On condition of anonymity, a customs officer in the Mundra port which has been set up by the Adani Group, told this writer that "All customs clearances for home consumption [of imported coal] are provisional and the bills of entry will be finalised only when all investigations in this regard are complete."
A week later, on 7 April 2016, in an apparently unrelated development, the Appellate Tribunal for Electricity (APTEL) set aside an order of the Central Electricity Regulatory Commission (CERC), granting compensatory tariffs to various companies, notably those in the Adani and Tata Groups (Adani Group Appeal No 100 of 2013 and IA No 116 of 2013 et al 2016) (Coastal Gujarat Power Limited vs Gujarat Urja Vikas Limited et al 2013).
Power Purchase Agreements Adani Power Limited, a subsidiary of Adani Enterprises Limited (AEL), operates the Mundra power project in the Mundra special economic zone in Gujarat. The plant has a total installed capacity of 4,620 megawatt (MW) and supplies power to Gujarat Urja Vikas Nigam Limited (GUVNL), Uttar Haryana Bijli Vidyut Nigam Limited and Dakshin Haryana Bijli Vidyut Nigam Limited on the basis of power purchase agreements (PPAs) signed with these companies. Coastal Gujarat Power Limited (CGPL), a subsidiary of Tata Power, operates a 4,000 MW ultra mega power project at Mundra, which supplies power under PPAs signed with GUVNL, Maharashtra State Electricity Distribution Company Limited, Punjab State Power Corporation Limited, Haryana Power Generation Corporation Limited, as well as with the power distribution licensees for Ajmer, Jodhpur and Jaipur in Rajasthan.
In accordance with the terms of the PPAs, it was incumbent on Adani Power and CGPL to secure their supply of coal through fuel supply agreements (FSAs) which were to be submitted under the PPAs. CGPL signed an FSA with IndoCoal Resources (Cayman) Limited, a subsidiary of the Indonesian coal mining and exporting group Bumi Resources. Simultaneously, Tata Power, CGPL's parent company, acquired a 30% stake in two coal mines owned by Bumi Resoures in Indonesia, effectively permitting it to supply fuel to its own subsidiary. This FSA provided coal to CGPL at discounted prices. Adani Power, entered into a similar FSA with its subsidiary AEL.
CGPL and Adani Power appealed to the CERC in 2013, claiming compensation for losses incurred because of an order passed by the Indonesian Minister of Energy and Mineral Resources in September 2010, which made it mandatory for coal exporters to claim rates from their buyers that were in line with international market prices for coal. This order, CGPL and Adani Power alleged, overruled their FSAs and resulted in a sudden rise in fuel costs. The CERC, in orders issued in February 2014, held that the “change in law" clause referred only to Indian laws and not foreign laws, and hence could not apply in this instance. It further held that conditions for force majeure were not satisfied by the facts of the case. (The doctrine of force majeure refers to a situation where it is impossible for a party in a contract to fulfil its obligations under the contract, due to events and circumstances outside its control, such as a war or an "act of god.") In the relevant PPAs, a force majeure event permitted a revision of the agreed tariffs as did a “change in law” event. The CERC held that the increase in costs over those specified in the FSAs signed by Adani Power and CGPL were not admissible as force majeure events since this situation did not prohibit or delay the execution of the PPAs.
However, the CERC assumed for itself the power to revise the tariffs outside the terms of the PPA under Section 79 (1) of the Electricity Act, 2003, ostensibly keeping in mind the interests of not just the consumer, but the producer of electricity, as well as the supplier or the distribution companies (discoms). The CERC set up a committee to determine the value of compensatory tariffs to be awarded to the two companies in the Adani and Tata Groups. This committee, chaired by Deepak Parekh, the chairman of HDFC (formerly Housing Development and Finance Corporation), included representatives of the Tata and Adani Groups, the discoms, as well as Arundhati Bhattacharya, the then managing director and chief executive officer (CEO) of SBI Capital Markets Ltd (SBICML) as an independent financial analyst (Committee Report for CERC 2013) (Bhattacharya went on to become the chairperson of the State Bank of India, the country’s largest public sector bank). The final reports were signed by Parekh and Bhattacharya, and subsequently adopted by the CERC in its final orders recommending compensatory tariffs to be awarded to the two companies (Disclaimer: Parekh is a trustee of the Sameeksha Trust which publishes EPW).
It is necessary to note that SBICML was the financial advisor and the mandated lead arranger for all power ventures of the Adani Group. The 2009–10 SBICML annual report included a mention of the total debt of Adani Power and Adani Power Maharashtra Limited as amounting to around Rs 10,000 crore (SBI Capital Markets Limited 2010; Thota 2009).
A confidential report submitted by KPMG, an independent consultant to the Parekh committee, detailed the structure of holdings of ten companies in the Adani Group, with Adani Enterprises Limited as the holding company and the rest as direct or indirect wholly-owned subsidiaries. The report, which is available with the author of this article, noted the presence of the Adani Group across the entire coal supply chain, from the mining company in Indonesia to various intermediaries (mainly in Singapore).
The bulk of the imported coal came to Mundra port (set up by the Adani Group). The report pointed out that all the Indonesian coal companies from which AEL imported coal were 100% subsidiaries of AEL. It reported the statement of the Adani Group that there was no “mark-up” on invoicing between the mining company and AEL and between AEL and Adani Power except for freight and insurance cost. Further, it stated that the gross calorific value (GCV) of the coal imported from Indonesia appeared to be 3,000 GCV or less, a fact that gains renewed significance in the light of the DRI investigation which found cases of misdeclaration of the GCV of imported coal to artificially inflate costs.
Verdict of APTEL
The CERC's orders came up for appeal before APTEL which issued its final order on 7 April 2016. In a 486-page judgment, dealing with Adani Power and CGPL in the Tata Group, as well as two other cases involving subsidiaries of the GMR Group and the Reliance Anil Dhirubhai Ambani Group, APTEL set aside the final orders of the CERC in the Adani and CGPL cases, arguing that the CERC's powers did not permit it to award compensatory tariffs under Section 79 (1) for tariffs that had been set through the price discovery mechanism of an international competitive bidding process under Section 63 of the Electricity Act. However, in re-evaluating the issues of “change in law” and force majeure under the relevant clauses in the PPAs, through which the CERC was empowered to revise tariffs in its capacity as a regulator, APTEL found that the change in Indonesian regulations did constitute a force majeure event, and directed the CERC to recalculate the necessary revisions in power tariffs.
In view of the DRI investigations on over-invoicing imported coal from Indonesia, there will be a direct impact on the electricity tariff fixation process not only by the CERC but also by all the various state electricity regulatory commissions (SERCs) in the country. Public sector companies like the NTPC and various state electricity boards, whose tariffs are regulated by both the CERC and the SERCs, also stand to be affected.
According to a highly placed source in the CERC, who spoke off the record, the compensation due to the Adani Group could work out to about Rs 6,000 crore while that to CGPL would come to over Rs 3,000 crore. This amount will be collected by the various discoms (including the ones in Haryana and Gujarat) from consumers. There will also be a loss to the exchequer since power is highly subsidised. APTEL has asked the CERC to specify the exact amounts to be paid to the companies in the Adani and Tata Groups. The hearings before the CERC are scheduled to take place in late May 2016.
It must be emphasised at this juncture that representatives of discoms were part of the committee on fixation of compensatory tariffs but they have not signed the committee’s final reports. Right through the proceedings before the CERC, these representatives of discoms opposed the award of any compensatory tariff to the company in the Adani Group. As stated, the reports were signed by Parekh and Bhattacharya and were accompanied by affidavits of “in principle” consent by the respective power distributors. The CERC’s orders noted that representatives of discoms did not sign the final reports as they need the approval of the concerned state governments.
The CERC source told this writer that “the DRI has submitted a report on its investigations on the Indonesian coal import issue to the CERC, which had previously not taken suo motu cognisance of the case.” The CERC will now be calculating the compensation to be paid to the Adani and CGPL Groups in light of the APTEL order. Time will tell as to how the discoms, which are supposed to represent the interests of the consumer before the CERC, will respond now, given that the report of the DRI's investigations are with the commission. It is likely that both the electricity producing companies as well as the discoms will appeal against APTEL in the Supreme Court. The findings of the investigations by the DRI may then enter the public domain.
The compensatory tariff issue does not stop with the Adani and Tata Group companies. The CERC source says there is a long queue of petitions have come from various power generating companies making claims for compensatory tariffs. The significance of this legal process cannot be understated. The outcome of these proceedings is expected to set important precedents for the pricing of electricity.
Power Plant Equipment
The story of the scam does not end here. Two years ago, in 2014, the DRI issued show cause notices alleging over-invoicing of power plant equipment to the tune of Rs 6,000 crore by a number of companies in the Adani Group. The notices alleged that the Adani Group had over-valued capital goods imported by Adani Power Maharashtra Limited, Adani Power Rajasthan Limited and Maharashtra Power Eastern Grid Power Transmission Company Limited. These companies were alleged to have indulged in a “trade based money laundering scheme” by mispricing equipment and by routing invoices through an intermediary in the United Arab Emirates, which is allegedly a “front company” of the group.
It has been two years since the notices were issued but the cases have not yet been adjudicated by the competent customs authorities. The notification for adjudication of the case against the Adani Group, which is available in the public domain, was issued in 2015. A senior law officer in the government noted that
“The devil lies in the delay. The more you delay the adjudication process, the more the cases fade away from public memory and our collective consciousness. There is no accountability in the system. No one is held responsible if adjudication is not done in a timely manner. And this is an important reason why the government, in this case the Department of Revenue in the Ministry of Finance, ends up losing most of such cases.”
Companies in the Adani Group are not the only ones that have been sought to be implicated. In 2015, the DRI issued show cause notices to companies in the Essar Group as well, alleging over-invoicing of power plant equipment to the tune of Rs 3,000-odd crore. It has in fact seized power plant equipment valued at around Rs 2,000 crore under the Customs Act, 1962. In the case of the Adani Group, the value of the equipment seized is more than three times higher at around Rs 7,000 crore.
In both instances, the mode of operation appears to have been similar. The customs duty levied on power and infrastructure projects has been either at zero or a very low rate, that is, 5% or a lower percentage of the value declared. If these companies are found to have inflated the value of the equipment imported, the equipment is not just liable for confiscation, the customs authorities can levy penalties on the firms. But this has not been done as yet.
Effect on Consumer Tariffs
How does over-invoicing power plant equipment lead to higher electricity tariffs for consumers? Electricity tariffs are arrived at by evaluating two sets of costs—fixed and variable. Fixed cost involves operations and maintenance together with servicing of equity and debt. Variable cost includes the fuel price and costs of fuel transportation and handling. Both the costs have a direct impact on tariff fixation. The fixed cost has a direct impact on tariff fixation, irrespective of whether a particular plant is operational (generates electricity) or otherwise as in the merit order dispatch, the plant with the lowest variable cost is placed on the top of the stack. As far as fixed cost is concerned, a plant’s debt-equity ratio is a key determinant when the regulator fixes the tariff. The regulators normatively divide debt and equity in a ratio of 70:30 while calculating tariffs. The cost of land, which is the other component of the fixed cost, is a relatively smaller component of the fixed cost. The major item under this head is the cost of equipment. By artificially over-valuing power plant equipment, the producer obtains a higher tariff from the regulatory authorities.
The tariff is the per unit value that the electricity generating company can recover from distributors/consumers and is based on the cost that it incurs in generation of electricity. The electricity generation companies submit their fixed cost and variable cost figures to the regulator. The expenditure incurred in installation of capital goods is also taken into consideration while fixing the tariff. The higher the fixed cost by way of over valuation of imports, the greater the tariff and, by implication, greater will be the illegal profits which are siphoned outside the country. In the end, the consumer of electricity pays.
The not so surprising fact is that the CERC has not initiated any action, suo motu or otherwise, to analyse the tariff structures in the context of allegations of over-invoicing of imported coal and power generating equipment, as the law officer quoted earlier pointed out. “The CERC has the power to take suo motu cognisance to initiate necessary action which it has not done,” the person remarked.
Skeletons in the Closet
As the earlier EPW article on over-invoicing of coal imports suggested, there are skeletons in the closets of nearly every other major Indian power producer. The power plant equipment was obtained from original manufacturers in China or South Korea, which were directly transported to India. However, the invoices for these were routed through intermediary companies in Dubai. These intermediaries were raising inflated invoices against which money was remitted from India.
In other words, by allegedly violating the laws of the land, these companies have been apparently able to inflate costs and, what is worse, got electricity users to pay for their malfeasance. It has been estimated that ordinary consumers of power have been charged excess amounts, varying between 50 paise and Rs 2 per unit (or kilowatt hour). The entire process appears to be premeditated involving multiple layers of related transactions, according to a source in the Finance Ministry, and virtually identical to the method deployed to over-invoice coal imported from Indonesia.
The Adani Group currently operates four thermal power plants at Mundra (Gujarat), Kawai (Rajasthan), Tiroda (Maharashtra) and Udupi (Karnataka). The four plants have a combined installed capacity of 6,480 MW. The Essar group operates three thermal power plants at Salaya and Vadinar (both in Gujarat) and at Mahan (Madhya Pradesh). The combined installed capacity of these plants is 2,810 MW. These companies are in the process of expanding their capacities. Adani Power is in the process of installing two more thermal power plants at Chhindwara (Madhya Pradesh) with a capacity of 1,320 MW and at Dahej (Gujarat) with a capacity of 2,640 MW. In view of the investigations going on, it is not clear whether these expansion programmes will proceed on schedule.
The DRI notices issued to the Adani Group in the cases of over-invoicing of power plant equipment name Vinod Shantilal Adani alias Vinod Shantilal Shah, the brother of Gautam Adani, making him liable to penalties under the Customs Act. The notice, which has been viewed by this writer, states that Vinod Adani appears to have conspired with other employees, including Jatin Shah and Moreshwar Rabade, to “execute the planned conspiracy of siphoning foreign exchange abroad.” The notice records that despite repeated summons being served to Adani and Shah, seeking their presence with requisite documents, they “appear to have deliberately avoided presenting themselves before the DRI and did not cooperate with the ongoing investigations.”
It is interesting to note that Vinod Adani's name has appeared in the recently leaked Panama Papers. The records of Mossack Fonseca, the Panamanian law firm revealed that two months after incorporating a company in the Bahamas is 1994, Vinod Adani requested a correction in the “spelling” of his name, changing it from Adani to Shah. GA International Inc was set up a few months after the formation of the Adani Group's flagship company, Adani Exports Limited (now Adani Enterprises Limited) in 1993 (GA presumably stands for Gautam Adani). AEL is the single largest importer of Indonesian coal. The possible role played by these offshore entities in the alleged over-invoicing is being probed by the DRI.
If the allegations in the DRI notice are substantiated, the violations will far exceed the breach of customs and electricity tariff fixation laws and rules. The beneficiaries of the scam could possibly have violated provisions of the Income Tax Act, the Foreign Exchange Management Act and the Prevention of Money Laundering Act. It is not known if the DRI has referred its findings to the Income Tax Department, the Enforcement Directorate or the Central Bureau of Investigation.
Sources in the Ministry of Power told this writer on condition of anonymity that this could well be one of the biggest scandals in the country’s power sector. The three methods through which electricity tariffs have been artificially inflated are—over-valuation of imported coal to the tune of Rs 29,000 crore, over-valuation of power plant equipment to the tune of Rs 9,000 crore and compensatory tariffs awarded to the tune of at least Rs 10,000 crore, or possibly higher. Sources in the government claimed that these are conservative figures and the total scam amount could very well go up as investigations are completed.
This scam could prove to be an acid test for the Ministry of Power and regulatory bodies such as the CERC, the SERCs and APTEL. In the government’s replies to a number of questions raised in both the Lok Sabha and the Rajya Sabha by different members of parliament during the month of May, none of the coal importing companies accused of inflating costs have been named. The names of companies in the Adani Group, the largest importer of Indonesian coal to India, find no mention in any of these replies either, even though parliament has been informed of the ongoing DRI investigation, sources told this writer.
This is a scam that has affected millions of middle class and poor Indians. The government's actions, or inaction, in the coming months will tell their own tale.



COD Of Reliance Sasan Power Plant Dt:07-05-2016

ALL INDIA POWER ENGINEERS FEDERATION
No. 09 / COD of Reliance Sasan Power Plant       07-05-2016
Hon’ble Chief Minister
Madhya Pradesh /Punjab/UP/Rajasthan/Haryana/Delhi/Uttrakhand
Sub: Fraudulent in getting COD of Reliance Sasan Power Plant
Respected Sir,
The Ultra Mega Power Project of Sasan was awarded through Competitive bidding to Reliance Power and the Power Purchase Agreement (PPA) was signed with seven procurer States in 2007. The project has six units of 620.4 MW each, total 3722.4MW, and the levelised tariff over 25 years was 119.6 paisa per unit. The bid rate, tariff, was about 70 p/unit for first two years and about 120 p/unit for next two years.
2. The period of commercial operation of project was to start with the commercial operation of the first unit. As per the Power Purchase Agreement (PPA) the unit has to undergo a performance test prior to declaration of commercial operation. Two main conditions of performance Test are that unit should run at super critical parameters of steam pressure and temperature, and that it should run for 72 hours at above 95% capacity. The first unit ie unit no 3 was put on performance test on 27 March 2013 which concluded on 30 March,2013. Even though the unit did not achieve super critical parameters, and could operate at only 16.34% capacity against the required 95%, Reliance declared the unit on commercial operation from 0000 hours of 31 March 2013. The first year of commercial operation was completed in one day. Thereby the low tariff of 70 p/unit which was to be applicable for first year, was practically applied for just one day. In this way the bid rate of 70 p/unit which was applicable for two years was practically limited to just one year and one day.
3. The Central Electricity Regulatory Commission in its judgment of 08-08-2014 declared that declaration of commercial operation on 31-03-2013 was invalid. Reliance/Sasan appealed before Appellate Tribunal which ruled in favour of Reliance on 31-03-2016, holding that the Commercial operation date of 31 March 2013 was valid. With this ruling the commercial billing rates of Sasan power would be shifted by one year which gives Reliance Power a benefit of Rs 1050 Crore. As a consequence additional burden will come on the procurer States as per their % share, viz Rs 394 Crore(MP), Rs 118 Crore(Delhi), Rs 118 Cr (Haryana),Rs 105 Crore(Rajasthan), Rs 131 Crore (UP), Rs 158 Crore(Punjab) and Rs 26 Crore (Uttrakhand).
With this such huge burden will be passed on to and recovered from the power consumers of these States. 4. The judgment dated 31 March 2016 passed by Appellate Tribunal is required to be challenged in the Supreme Court by each of the procurer States so that the unjustified burden on power consumers is avoided. AIPEF represents that the Chief Minister of each of the Procurer States may intervene and order the filing of appeal in Supreme Court at the earliest, within the period allowed for appeal.
5. Synopsis & summary of the case is attached.
With Regards.

Shailendra Dubey
Chairman



AIPEF Appeal filed in SC Against COD of Sasan Power Plant Dt:05-05-2016

ALL INDIA POWER ENGINEERS FEDERATION
No.07/Supreme Court – Sasan        05-05-2016
All Office Bearers – A I P E F
Chairman/Secretary General – SIPEF/WIPEF/EIPEF/NIPEF
President/General Secretary – All AIPEF Constituents
Sub: Appeal in Hon Supreme Court against APTEL decision regarding COD of Sasan Power Plant
The All India Power Engineers' Federation (AIPEF) has challenged the order dated 31/3/2016 passed by the Appellate Tribunal for Electricity (APTEL) which decided that the first unit of Sasan Power Project, unit no. 3 attained Commercial Operation Date (COD) on 31/3/2013 even though the unit of 620.4 MW attained only 101.38 MW as certified by the independent engineer. This order of APETL dated 31/3/2016 has set aside and quashed the order of CERC dated 8/8/2014 wherein CERC had rejected the claim of COD on 31/3/2013. AIPEF appeal was filed in Supreme Court today, 5th May 2016.
The CERC while rejecting the claim of Sasan Power Limited for COD on 31/3/2013 had declared it as a mockery of established system and had recorded adverse remarks against the independent engineer who had certified the COD on 31/3/2013.
While the APTEL judgment was issued on 31/3/2016, on the same date of 31/3/2016, Reliance Power issued a Media Release wherein it was stated that Reliance Power / Sasan would get revenue of Rs. 1050 crores as a result of the APTEL judgment.
There are seven procurer states whose power utilities have signed PPA for UMPP Sasan. These states/utilities would have to bear the additional burden Pro-Rata to their share in UMPP Sasan, viz
Madhya Pradesh 37.5%
Punjab 15%
Haryana 11.25%
Rajasthan 10%
Delhi 11.25%
Uttar Pradesh 12.5%
Uttrakhand 2.5%
All India Power Engineers Federation represents the power engineers of the country. In addition to AIPEF, individual power consumers from Uttar Pradesh, Delhi & Punjab are the appellants. 2. Final Sasan Synopsis and Appeal filed in Hon Supreme Court today as decided in FC Meeting held at Dehradun on 23rd April, 2016 are attached and all state constituents are requested to issue press note from their head quarters on above lines in this respect.
Shailendra Dubey
Chairman



Power engineers threaten to go on nationwide strike Dt:26-04-2016

The power engineers have threatened to proceed on an all India indefinite strike if the Central gover nment rushes through the Electricity (Amendment ) Bill in its present form.
Giving this information here on Monday, All India Power Engineers’ Federation (AIPEF) chairman Shailendra Dubey said that the federation’s national council at its meeting in Dehradun on Sunday decided to gear up for a phased agitation that would culminate in a countrywide strike against the proposed Bill.
The provisions of the Bill, he claimed, went against the interests of the consumers as well as the government power companies. “Our main objection is against the provision that seeks to separate content (power) and carriage (infrastructure) where in the government company will be responsible to carry electricity up to the pole while the private companies would be allowed to distribute power from the pole to the consumers to earn profit ,” Dubey explained.
Dubey suggested that instead of hurriedly pushing the controversial Bil, the Central government should hold debate and discuss various experiments conducted in the power sector during last 20 years with various stakeholders including employees and consumers. He said the unbundling of the state electricity boards (SEBs) into independent corporations and distribution companies had only compounded the losses of the power sector making it difficult for them to serve consumers efficie



AIPEF Federal Council decides to oppose Electricity (Amendment ) Bill Dt:25-04-2016

Power engineers for putting electricity amendment bill on hold

All India Power Engineers Federation (AIPEF) has urged the Government of India to put on hold the proposed electricity amendment bill till it is discussed in detail with all the states and other stake holders including power engineers & power workers and their concerns should be addressed.
The Federal Council of All India Power Engineers Federation ( AIPEF) in its meeting held today at Dehradun deliberated the proposed amendments in Electricity Act 2003 . The representatives of 16 states participated in the deliberations.
Shaliender Dubey Chairman AIPEF said that the Federation has demanded review of power policies of last two decades before going on for any further amendments & experiments in already ailing power sector due to wrong energy policies of successive state & central Govt. The Federation has already submitted memorandum of objections on Electricity (Amendment )Bill 2014 and demanded that this must be discussed in detail by the Ministry of Power with its representatives before placing it in the parliament.
Dubey demanded that the points already agreed by power minister Piyush Goyal should be added in the draft electricity amendment bill .The agreed points include that the mainly the amendment bill shall be a enabling provision in the act and shall not be mandatory for the states, no cherry picking will be allowed and all the supply licenses will have universal power supply obligation, there will be no compulsion to introduce private power distribution licenses and the states will have the option to go for all state owned power supply licensees. States will have to submit the roadmap in five years and there will not be any time limit to implement to roadmap. V K Gupta a spokesperson of AIPEF said that whereas the Electricity Act 2003 was enacted for reviving the financial health of power sector but this Act has failed to achieve its objective resulting in more than 8 lakh Crore losses and debt in DISCOMS. Without analyzing the causes and circumstances of failure to achieve its objective, the Govt. of India is undertaking an exercise to introduce more amendments which would surely deteriorate the already precarious financial health of the State Discoms .
It is recognized and accepted without dispute that the State Discoms in the country as a whole are in poor financial health with accumulated debt and losses of the previous years. The Government of India is now introducing the UDAY Scheme by which the State Governments would own the responsibility to improve financial condition of the State Discoms and to start with taking over of the outstanding debts of the DISCOMS in a phased and time bound manner. Even with this step, it would take several years for achieving financial turn-around of the State Power sector and no one can assure that when will be actual turnaround of Discoms.
Padamjit Singh Chief Patron AIPEF said that under these circumstances, to introduce the concept of supply licensee so as to separate out carriage and content, it would lead to exodus of high paying and profitable consumers to the private licensees while putting the extra burden on the state owned supply licensee. A particular feature of the amendment is to introduce an Intermediary Company to which all the power purchase agreements would be assigned. These PPAs would include Central sector companies, State generating companies and stations as well as private sector generating stations in the State. The role and working of the Intermediary Company under the proposed scheme would be extremely difficult to execute.
Most of the States are having the problem of stranded capacity of power stations in the state sector . The situation is wide spread wherein private sector plants are operated in preference while central sector plants are not fully scheduled and also state thermal stations are being kept shut down.
Rathnakar Rao secretary general AIPEF said that the Government of India should recognize and accept that the conditions prevailing in the power sector are not at all favorable for introducing far reaching changes in distribution. The following major issues which includes turnaround of financial health and restoring financial viability , curbing / minimizing of thefts of electricity etc., development of energy accounting, metering and IT systems and last but not the least the practical impossibility of successful operation by the Intermediate company should be examined in detail before processing the amendments in electricity bill



AIPEF Press Note 23rd April Dt:22-04-2016

  Press Note       23 – 04 – 2016
Power Engineers Urge Central Govt To Put On Hold Electricity Amendment Bill AIPEF TO ISSUE WHITE PAPER ON CORPORATE SCAMS GOING ON IN POWER SECTOR: CENTRAL GOVT URGED TO REVIEW POWER POLICY BEFORE GOING FOR FYRTHER AMENDMENTS
All India Power Engineers Federation (AIPEF) has urged the Government of India to put on hold the proposed electricity amendment bill till it is discussed in detail with all the states and other stake holders including power engineers & power workers and their concerns addressed. AIPEF has also demanded review of power policies of last two decades before going on for any further amendments & experiments in already ailing power sector due to wrong energy policies of state & central Govt.
The Federal Council of All India Power Engineers Federation ( AIPEF) in its meeting held today at Dehradun deliberated the proposed amendments in Electricity Act 2003 . The Federation has already submitted memorandum of objections on Electricity (Amendment ) Bill to the Ministry of Power and this must be discussed in detail by the Ministry of Power with its representatives before placing it before the parliament in coming budget session . Whereas the Electricity Act 2003 was enacted for restoring the financial health of power sector but this Act has failed to achieve its objective resulting in more than 08 lac Cr losses & debt on DISCOMS. Without analyzing the causes and circumstances of failure to achieve its objective, the Govt. of India is undertaking an exercise to introduce more amendments which would surely deteriorate the already precarious financial health of the State DISCOMS.
It is recognized and accepted without dispute that the State DISCOMS of the country as a whole are in poor financial health with accumulated debt and losses of the previous years. The Govt. of India is now introducing the UDAY Scheme by which the State Governments would own the responsibility to improve financial condition of the State DISCOMS and to start with taking over of the outstanding debts of the DISCOMS in a phased and time bound manner. Even with this step, it would take several years for achieving financial turn-around of the State Power sector and no one can assure actual turn around of DISCOMS.
Under these circumstances, to introduce the concept of Supply Licensee so as to separate out carriage and content, it would lead to exodus of high paying and profitable consumers to the private licensees while putting the extra burden on the state owned supply licensee.
A particular feature of the amendment is to introduce an Intermediary Company to which all the power purchase agreements would be assigned. These PPAs would include Central sector companies, State generating companies and stations as well as private sector generating stations in the State. The role and working of the Intermediary Company under the proposed scheme would be extremely difficult to execute. Most of the States are having the problem of stranded capacity of power stations in the State including Central sector and private sector. The situation is wide spread wherein private sector plants are operated in preference while central sector plants are not fully scheduled and also state thermal stations are being kept shut down.
The most difficult part of scheduling and dispatch of different generation sources with different energy rates is presently being achieved under the existing set up through close coordination between the State DISCOM, State SLDC, State generation and other sources of generation. Under the proposed scheme, these functions would be concentrated in the Intermediary Company and this company would not be able to perform these functions as efficiently and in optimum manner as at present.
In any chain of supply, the chain is as strong as the weakest link. In the proposed scheme of separating carriage and content, the Intermediary Company would be the weakest link which would make this scheme unworkable. The other issues which need to be addressed before such scheme is introduced, that the problem of theft of hooking of power must be eliminated. No scheme of any kind will work unless these basic weaknesses are addressed. So far, there is little evidence of seriousness in the States to tackle these problems.
Government of India should recognize and accept that the conditions prevailing in the power sector are not at all favorable for introducing far reaching changes in distribution. The following major issues which includes turnaround of financial health and restoring financial viability , curbing / minimizing of thefts of electricity etc., development of energy accounting, metering and IT systems and last but not the least the practical impossibility of successful operation by the Intermediate company should be examined in detail before processing the amendments in electricity bill.



CENTRAL GOVT BOWS DOWN - ANTI WORKER ORDER ON EPF WITHDRAWN LONG LIVE WORKERS UNITY Dt:20-04-2016

Bowing to pressure, govt rolls back PF withdrawal rules: 10 key points

Under fire from political opponents and bowing to pressure from trade unions, the government withdrew on Tuesday its new rules on provident fund withdrawal.
Within hours of announcing the decision to withhold the rules till July 31, labour minister Bandaru Dattatreya declared that the proposed move has been rolled back.
Read more: Bengaluru violence forces rollback of restrictions on PF withdrawals
“We are cancelling the notification issued on February 10. The old system will continue,” he told a press conference in Hyderabad on Tuesday night - his second there in the issue in less than five hours. Dattatreya said the employees, whenever they want, can withdraw employer’s contribution of 12%. The decision marks the government’s second u-turn on changes to the pension fund. In March, the government withdrew a plan to tax EPF withdrawals after an outcry from salaried workers.
Here is all you need to know about the controversy:
1. The BMS on Tuesday said they will continue to protest till all restrictions on PF withdrawal were removed. The government decision came in the wake of protests by garment workers in Bengaluru to press for removal of such curbs. 2. In a spurt of violence, garment workers, protesting the new Provident Fund rules, set afire several vehicles and attacked a police station. The spontaneous stir, with no trade union leading it, spun out of control on the second day as protesters went on rampage pelting stones at Hebbagodi police station and torching seized vehicles parked there. Police had to resort to lathicharge and fire teargas shells to disperse violent protesters.
3. According to the government, the protestors were migrant workers, who work for two to three years at one place and then migrate.
In pics: Vehicles torched, police station attacked in Bengaluru 4. Officials said about 25 policemen, including an Assistant Commissioner of Police, suffered injuries in the violence and they are undergoing treatment at a hospital. At least two Karnataka State Road Transport Corporation buses and one of Bengaluru Metropolitan Transport Corporation were set on fire.
5. Incidents of stone-pelting on buses and other vehicles were reported from different parts of Bengaluru such as Bannerghatta and Jalahalli cross, as also near the Electronics City, the hub of IT firms. Traffic jams were reported at various entry and exit points in the city like Hosur Road, which leads to Electronics City and Tumkur Road, which has a large concentration of garment units.
6. Workers opposing amendment to Employees Provident Funds and Miscellaneous Provisions Act expressed fear that the new rule would take away their right over the employer’s contribution of provident fund till they attain 58 years. 7. Following the concerns raised by trade unions and other stakeholders, the ministry had earlier decided to keep the notification in abeyance. The unions however wanted a complete rollback of the decision tightening the PF withdrawal norms. The scrapping of the notification would mean that the EPFO subscribers who are out of job for more than two months can file for full and final settlement of provident fund.
8. Trade union leaders said that they are of the view that the curbs on withdrawal are unnecessary as the quantum involved is just 3.67% of the employer’s contribution.
“It is an unwanted and unnecessary decision. All the trade union representatives in the board of trustees had opposed the move. Even a couple of employer’s representatives were in agreement with our views,” said Centre of Indian Trade Union (CITU) president and CBT member AK Padmanabhan. According to him, it is a confusion created by the bureaucracy and there is no rationale for restricting the withdrawal.
9. In February, the labour ministry had issued a notification restricting 100% withdrawal of provident fund by members unemployed for more than two months. The earlier decision was then deferred till April 30 but as protests persisted, the government decided to postpone it yet again. The EPFO had also restricted withdrawal of PF to the employee’s own contribution and interest earned on that, if the claimant has remained unemployed for more than two months.
10. According to the new norms proposed earlier this year, subscribers are not to be allowed to claim withdrawal of PF after attaining 54 years of age, and would have to wait till 57. Earlier norms allowed contributors or subscribers to claim 90% of their accumulations in their PF account at the age of 54 years, and the final claims to be settled just one year before their retirement.



CENTRAL GOVT GIVES CLEARANCE FOR EXTENDING AGE UP TO 70 Yrs FOR AP STATE ELECTRICITY REGULATORY COMMISSION HEAD Dt:19-04-2016

Centre Relaxes Age Rule to Let AP Regulator Stay In Job

New Delhi:   FRIEND IN NEED MHA gives Chandrababu govt immediate clearance to raise retirement age at APSEC, clearing way for Justice G Bhavani to continue in office
When it comes to getting his candidate a top job, there is no stopping Andhra Pradesh Chief Minister N Chandrababu Naidu ­ at least not in Centre. He is one ally that Prime Minister Office has clear instructions to respond in double quick time.
Few would know Justice G Bhavani Prasad in Lutyens but he is very important to Naidu as head of the AP State Electricity Commission.Important enough for him to amend the State Electricity Act to facilitate his reappointment just like the Modi government amended the TRAI Act to make Nripendra Misra Principal Secretary to the Prime Minister.
In Prasad's case it was to increase the retirement age from 65 to 70. He turned 65 on April 9 and in the anticipation the Naidu government moved to amend the relevant state electricity acts on March 26 in the Assembly.But the subject being in the Concurrent List, assent of the Centre was needed. In record time, the matter reached Home Ministry which moved stakeholder departments by March 28.
There is also a question of legal principle involved. Just like in TRAI Act, even heads of electricity regula tory bodies are not reappointed or granted extension to ensure that the position is not influenced by political patronage. Section 85 of the Electricity Act, 2003 explicitly states that “the Chairperson or other member in the Central Commission or the State Commissions shall not be eligible for reappointment in the same capacity as the Chairperson or a Member in that Commission in which he had earlier held office as such“.
But exceptions were made and the Centre quite rapidly gave its goahead. Now, the Bill is with the Rashtrapati Bhawan because as it turns out, even President Pranab Mukherjee's consent is mandatory.That has taken a bit longer than the speed at which the Centre moved but Rashtrapati Bhawan declined to comment on the matter.
“The basic idea is to ensure that the Chairman and members can continue in the position for five years for smooth functioning of the Regulatory body. In case of a High Court Judge, they even retire at 62 so such individuals would not be able to continue on the position if appointed,“ Ajay Jain, Principal Secretary, Department of Energy, Andhra Pradesh told ET.
Meanwhile, Justice Bhavani Prasad said it was for the state government to decide if they wanted him to continue in the position again or not.
“I have retired and yes there are provisions in the new Bill that allow for reappointment. However, I had not applied even earlier and was appointed by the government in consultation with the Chief Justice. If the system feels the need for something I will see.It is not for me to do so on my own. It is for the state government to decide“, Prasad told ET.



Lowest job growth in 8 years - Fall Out of pro -corporate policies Dt:16-04-2016

Generation of jobs in 8 key sectors hit six-year low in 2015

New jobs in eight sectors of the economy — textiles, leather, metal, automobiles, gems and jewellery, transport, information technology and handloom — fell to a six-year low of 1,35,000 in 2015 as against 4.21 lakh jobs in 2014 and 4.19 lakh jobs in 2013. This is also the worst record of new jobs in October-December quarter in last six years, registering a decline of 20,000 compared with a rise of 1.17 lakh jobs in the same period in 2014, the latest Labour Bureau data shows. Employment had increased by over 1.34 lakh in July-September 2015, had declined by 43,000 in April-June and risen by 64,000 in January-March. In October-December, the highest decrease in employment was seen in the IT/BPO sector by 14,000, followed closely by 13,000 in automobiles sector, 12,000 in metals, and 8,000 in gems and jewellery sector. Textiles including apparels was the only sector which showed an increase in jobs, having registered 37,000 jobs in the October-December quarter. - See more at: http://indianexpress.com/article/business/business-others/employment-data-generation-of-jobs-in-8-key-sectors-hit-six-year-low-in-2015-2754160/#sthash.gh3K8pP0.C28DBEEO.dpuf


RELIANCE GETS UNDUE BENEFIT OF more than Rs 1000 Cr IN SASAN POWER PLANT Dt:15-04-2016

APTEL upholds Sasan project’s COD

In an order that will improve the cash flow of Reliance Power-promoted 4,000 MW Sasan Ultra Mega Power Plant (UMPP), the appellate tribunal for electricity (APTEL) quashed the Central Electricity Regulatory Commission’s (CERC) order that rejected the commercial operation date (COD) suggested by the firm for the first unit of the plant.
The APTEL order allows the company to recover `1,050 crore from the procurers. The UMPP had declared the COD of its first unit to be March 31, 2013, on the basis of certificate obtained from the independent engineer. However, the same was successfully challenged by Western Regional Load Despatch Centre (WRLDC) before CERC. The commission, while rejecting the said COD, set it for August 16, 2013. The then power developer approached the tribunal.
“CERC has gone beyond the scope of prayers made in the impugned petition while passing the impugned order. Hence, all the findings and observations made by the learned Central Commission in the Impugned Order beyond the scope of the payers of the Impugned petition are liable to be set aside or quashed as suffering from perversity or illegality and based on improper appreciation of the material available before the Central Commission as regards to the prayers made in the impugned petition,” APTEL observed in its order.

APTEL upholds Sasan project's commercial date of operation

· NEW DELHI: Reliance Power today said the Appellate Tribunal for Electricity (APTEL) has upheld its Commercial Operational Date (COD) plea for Sasan plant, which will pave the way for the project to recover Rs 1,050 crore from power procurers.
· "The APTEL order now paves the way for Sasan Power Ltd to recover the unpaid amount of nearly Rs 850 crore from the procurers. Sasan Power would also be entitled to nearly Rs 200 crore of carrying cost as per the Power Purchase Agreements," the company said in a statement.
· The first unit COD of Sasan UMPP was challenged by WRLDC (Western Regional Load Despatch Centre).
· The WRLDC is the apex body to ensure integrated operation of the power system in the western region.
· The company said the first unit of 660 MW achieved commercial operation on March 31, 2013. The same was challenged by WRLDC before Central Electricity Regulatory Commission (CERC).
· CERC, in its order in August 2014, allowed the Petition of WRLDC and dismissed the COD date of March 31, while the same was accepted by all power procurers from the project.
· Aggrieved by the CERC order, Sasan Power Ltd appealed the same to APTEL, which today allowed the appeal of Sasan UMPP and dismissed the petition filed by WRLDC before CERC.
· "This enables Sasan Power to recover its revenue backlog of close to Rs 850 crore from its procurers. PPAs allow carrying cost due which is close to Rs 200 crore," the company said.
· Reliance Power's Sasan Ultra Mega Power Project is in Singrauli district of Madhya Pradesh, which is an integrated power plant cum coal mining project at a single location, involving an investment of over Rs 27,000 crore.
· Sasan UMPP has been delivering 'best-in-class performance among its peers in its very first year of full operations with plant operating at over 100 per cent plan load factor and coal mines achieving the highest coal production amongst private sector player producing nearly 17 million tonnes during 2015-16.



FAVOUR TO ADANI & TATA POWER - WILL BURDEN CONSUMERS Dt:15-04-2016

Adani and Tata Power: Power consumers in Hry may get further burdened

With the appellate tribunal for electricity (APTEL) directing the Central Electricity Regulatory Commission (CERC) to assess the extent of impact of ‘force majeure’ event on the projects of Adani Power and Coastal Gujarat Power Ltd (CGPL) and give them such relief as may be available to them under their respective power purchase agreements (PPA) signed with the Haryana Power Utilities, electricity consumers in the state may have to bear the burden of the revised power tariff. Force majeure is an event which cannot be anticipated by human foresight or if anticipated is too strong to be controlled.
The APTEL’s order of April 7 also said the entire exercise should be done within three months.
Additional chief secretary (power) Rajan Gupta, when asked about the state’s response to the APTEL judgment, said the department was studying it and a decision whether to challenge it would be taken subsequently.
Power sector experts, however, say that if Haryana power companies fail to challenge the APTEL order before the Supreme Court, the CERC will determine the revised tariff in terms of the force majeure clause of the PPA. “Consumers will be further burdened as the revised tariff will be passed in the form of fuel surcharge adjustment (FSA) for the previous years. Moreover, the power tariff will be in for upward revision as the revised tariff load will reflect in the annual revenue requirement (ARR) filed by distribution companies before state power regulator,’’ said a power sector official.
Power purchase contracts
Haryana contracted 1,424 megawatt (MW) power from Adani Power in 2007 from its power project at Mundra in Gujarat. Adani Power’s bid was based on blend of domestic and imported coal in the ratio of 70:30. The state also signed power purchase agreement for 400 MW power from CGPL under ultra mega power project (UMPP) based on 100% imported coal. Power from M/s Adani was contracted at a levelised tariff of Rs 2.94 per unit for 25 years at state periphery through its dedicated network whereas in the case of CGPL, 380 MW of power was contracted at a levelised tariff of Rs 2.26 per unit also for a period of 25 years.
Companies sought tariff increase
Both the power companies later sought an increase in the tariff due to change in Indonesian regulations on coal invoking provisions of force majeure and change in law in the CERC. The central commission though held that force majeure and change in law were not applicable in the case, but in February 2014 allowed APL and CGPL a compensatory tariff of 61 paise and 52 paise respectively to mitigate their hardship on account of increase in imported coal prices in addition to allowing arrear payment with effect from date of operation.
SC granted stay
Haryana’s power distribution companies filed an appeal in the APTEL against the CERC orders, along with a stay application on recovery of compensatory tariff, but APTEL declined. It decided that arrears for 2012-2013 may not be paid till final decision but directed the payment of dues thereafter regularly as per the CERC order. The distribution companies then filed an application in the Supreme Court which granted a stay in Haryana’s favour on August 25, 2014 and ordered APTEL to decide the matter expeditiously.
The APTEL, in its April 7, 2016 order, said: “We hold that promulgation of Indonesian regulation has resulted in a force majeure impacting the projects of Adani Power and CGPL adversely. The generators would, therefore, be entitled to relief only as available under the power purchase agreements (PPAs).”
How much burden?
Power officials said after a compensatory tariff of 61 paise and 52 paise was allowed by the CERC in 2014 for APL and CGPL respectively to mitigate their hardship on account of increase in the prices of imported coal, the distribution companies were additionally burdened with an about Rs 1,400 crore annually and Rs 35,000 crore for 25 years. “And all this would have to be passed onto the consumer eventually. One can expect a similar financial burden to be passed on to the consumers,’’ said an official.



BIG PRIVATE HOUSES INVOLVED IN OVER-INVOICING OF IMPORTED COAL WHICH HAS INCREASED POWER TARIFFS Dt:10-04-2016

A 29000 Cr Rs over invoicing report of Directorate Of Revenue Intelligence (DRI)

Adani Power, Reliance Power, Essar, JSW are the main private houses involved in this racket which is a clear case of money laundering as well as resulting in hike of power tariff. Till now nothing has been done by GOI against culprit private houses. AIPEF demands stern action against these power companies including black listing irrespective of their closeness with top political leaders in power in central Govt. Three news paper reports are attached. Click all three links to read full report.



" ONE NATION, ONE GRID & ONE PRICE " ONLY POSSIBLE WHEN ONE POWER COMPANY Dt:08-04-2016

AIPEF SAYS " ONE NATION, ONE GRID & ONE PRICE " ONLY POSSIBLE WHEN ONE POWER COMPANY AT LEAST IN ONE STATE. TO ACHIEVE THE GOAL AIPEF DEMANDS ROLL BACK & INTEGRATION OF ALL POWER COMPANIES. AIPEF ALSO DEMANDS WITHDRAWL OF ELECTRICITY(AMENDMENT) BILL WHICH WILL PAVE PATH FOR MULTIPLE SUPPLY LICENCEES WHICH MEAN MULTIPLE POWER PRICE WHICH WILL BE AGAINST DECLARATION OF POWER MINISTER Sri Piyush Goyal of -" ONE NATION, ONE GRID & ONE PRICE "
  



Power engineers concerns on electricity bill not addressed NIPEF Dt:26-03-2016

Power engineers concerns on electricity bill not addressed NIPEF

Northern India Power Engineers Federation (NIPEF) in its meeting held today urged power ministry to address its concerns on electricity bill and demanded that the Electricity (amendment) Bill should be modified suitably as agreed by the Union Power Minister Piyush Goyal for meaningful reforms in power sector.
The Federal Council of NIPEF held its meeting today and was attended by delegates from all the northern states. Padamjit Singh Chief Patron All India Power Engineers Federation (AIPEF) said that the power sector utilities are facing two basic problems of desperate financial sickness and high level of AT & C losses and government continues with the experimentation in power sector without addressing these problems. The experimentation is bound to fail if not addressed to these two problems. The average per unit revenue realized is less than the average cost of per unit supply.
Shaliender Dybey Chairman AIPEF said that Piyush Goyal Union Power Minister has agreed that provisions in the Electricity Amendment Act shall have enabling provision and not mandatory on states . No cherry picking will be allowed & all the power supply companies including private companies shall have universal power supply obligation. State will have option to retain only government supply companies for power supply and there will be no compulsion for state to opt for private supply companies.
The time frame for states for preparing road map should be 10 years and not five years as proposed in the amendment bill for segregation of carriage & content.
. V K Gupta a spokesperson of Federation said that the power distribution is of prime concern to the state governments and not to the Centre. It is not justified for Central Government to notify policies. This should be better left to the jurisdiction and authority of the concerned States as electricity is a concurrent subject under the constitution.
.The Federal Council of Northern India Power Engineers Federation (NIPEF) is of firm view that the third financial bailout plan of National Democratic Alliance government under the name of UDAY may meet the same fate of earlier two financial bailout schemes in the absence of a mechanism to monitor their performances. The ruling parties in a number of states have agreed to the terms and conditions of the plan now, but this might be difficult to implement in the absence of political will. For a politician, votes are more important than reforms and state governments may still shy away from rewriting the contract on power supply and tariffs.
The Federal Council of Northern India Power Engineers Federation (NIPEF) in its meeting unanimously elected G S Bhadoria from Rajasthan as Chairman and Sanjeev Sood from Punjab as Secretary General.
R PS Sidhu (Himachal) Kartik Dubey (Uttrakhand), KK Malik (Haryana) and Satya Paul (Delhi) were elected vice chairman. Yash Pal Sharma ,D C Dixit.V K Gupta and DK Jain were elected Secretary (Hq.)Secretary Organisation,Secretary Publication and Secreatry Finance respectively.



TATA POWER SCAM - CERC Investigates Alleged Irregularities by Tata Power Dt:06-01-2016

MUNDRA POWER SALE - CERC Investigates Alleged Irregularities by Tata Power

New Delhi: ?Regulator takes up case on complaints by a retired engineer; power firm calls charges malicious>
Power regulator Central Electricity Regulatory Commission (CERC) has initiated a suo moto probe into Tata Power's alleged irregularities in commissioning four of five units at Mundra Ultra Mega Power Project (UMPP).
The regulator is acting on complaints received from a retired engineer of the Madhya Pradesh Electricity Board (MPEB), who has alleged non-compliance of provisions for the power purchase agreement by Mundra UMPP , lea . 5,000-crore excess billing ding to ` by Tata Power. The company dismissed all allegations as malicious and said that it appears to be an attempt to defame it.
Last Wednesday, CERC initiated suo moto proceedings and directed the issue of notices to Coastal Gujarat Power (CGPL), the Tata Power unit which operates Mundra UMPP, distribution companies buying power from the project, independent engineering consultancy Black & Veatch, which certified the project, and the Western Region Load Dispatch Centre (WRLDC) “to explain the facts and circumstances leading to the declaration of commercial operation of units of Mundra UMPP“.
Retired engineer MC Bansal had written to the corporate affairs ministry alleging willful misdeclaration by Tata Power that it has commissioned all five units of Mundra in the letter of offer dated March 19, 2014 for the Tata Power's rights issue. Tata Power in its reply said that the load change happened on account of restrictions imposed by the electricity grid.
“The complaint is not just malicious with wrongful motive, but also the complainant has no locus standi to make such allegations.... This just seems to be an attempt of competition to defame and discredit the achievements in commissioning of all five units of Mundra UMPP in record time....,“ the company had stated.
The company has also declared that the commissioning of each of the units was certified by Black & Veatch Consulting, independent consultants appointed by Gujarat Urja Vikas Nigam, Maharasthra State Electricity Distribution Co, Ajmer Vidyut Vitran Nigam, Jaipur Vidyut Vitran Nigam, Jodhpur Vidyut Vitran Nigam, Punjab State Electricity Board, Haryana Power Generation CO, etc, and CGPL pursuant to the provision of the PPA. “Accordingly, we deny these allegations on the basis that they are absolutely baseless, devoid of merit and carry neither authentication nor any weight,“ said Tata Power.
Bansal alleged that it is evident from performance test reports for the 4,000-mw Mundra UMPP that four out of five units totaling 3,200 mw did not comply with the PPA requirements and thus did not achieve commencement. The PPA required the UMPP to run at 95% load for 72 hours.


Power Engineers body pays tributes to A.B.Bardhan Dt:3-01-2016

AIPEF chairman Shailendra Dubey@ersdubey said that stopping privatisation would be a greatest respect to AB Bardhan.

CHANDIGARH: All India Power Engineers Federation (AIPEF) mourns the death of A B Bardhan , a multifaceted leader and convener of National Co-ordination Committee of Electricity Employees and Engineers.
A.B. Bardhan died on January 2 in a Delhi hospital where he was admitted last month after he suffered a paralytic stroke.
His death is a great loss to the workers & engineers movement, trade unions and to the people at large. Bardhan was a close friend and well-wisher of AIPEF. Bardhan had attended many meetings and Conferences along with AIPEF leaders. He used to take keen interest in our struggles and activities. He was founder Convener of NCCOEEE which was formed in Jaipur in April 2000 to protect Power Sector of India.
A. B. Bardhan has held several leading positions in the Indian Trade Union Movement, as a top official of several unions and National Federations. He became the General Secretary of the All India Trade Union Congress (AITUC) in March 1994, a post which he relinquished on becoming the General Secretary of the Communist Party of India in 1996.



AIPEF PAYS HOMAGE TO VETERAN TRADE UNION LEADER Com A B BARDHAN Dt:3-01-2016

AIPEF/ HOMAGE to Sri A B Bardhan

We are extremely sorry to inform the death of veteran Trade Union leader and a life-long crusader for the working class, Com. A.B. Bardhan on 02-01-2016 evening around 8-30 PM. in a Delhi hospital where he was admitted last month after he suffered a paralytic stroke.
Born in 1925 in Sylhet, a place which is now in Bangladesh, Com Bardhan was drawn to the movement in his school days itself. He joined the Student Movement (All India Students’ Federation) in the year 1940, when he entered the University of Nagpur, presently Maharshtra. The same year, in late 1940, he was admitted into the then illegal Communist Party of India.
He became a full-time student organiser, while continuing his studies, and in 1945 he was elected the Secretary of AISF, which he continued to be till early 1948. He was also elected the President of the Nagpur University Students’ Union. He left home and became a Party full-timer from 1941.
After leaving the student movement, he joined as a Trade Union organiser, and worked amongst power workers, railway workers, textile workers, defence workers, press workers, engineering workers and so on. He was the pioneer in organizing handloom weavers all over the country. He was the darling leader of All India Federation of Electricity Employees.
For his activities as a student, trade union and Party organiser, he was arrested several times, and spent a total of about four and half years in jail starting from the ‘Quit India’ (August 1942) Movement. He was underground for nearly two years, during which he worked as a trade union organiser in Calcutta (West Bengal).
He continued his studies which were interrupted several times due to arrests, etc, and obtained the M. A. (Economics) and L. L. B. (Bachelor of Law) degrees.
In 1957, he was elected for a five-year term to the Maharashtra State Legislative Assembly.
In 1968, he was elected to the National Council of the CPI. In 1978, he was elected to the Party’s Central Executive Committee. In 1982, he was elected to the Party’s Central Secretariat. He became the Deputy General Secretary of the CPI in 1995 and in 1996 he was elected the General Secretary when Com Indrajeet Gupta became the Home Minister in UPA Government. Since then, he had been continuously elected as General Secretary till 2012 when he decided to step down in view of failing health.
Com. A. B. Bardhan has held several leading positions in the Indian Trade Union Movement, as a top official of several unions and National Federations. He became the General Secretary of the All India Trade Union Congress (AITUC) in March 1994, a post which he relinquished on becoming the General Secretary of the Communist Party of India in 1996.
Com. Bardhan was a prolific writer. Apart from writing on ideological and political issues, he has written number of books and booklets on problems of Adivasis, minorities, history of working class movement, etc. His last book was on ‘Crisis of Corporate Capitalism’ that had number of editions during the last one decade.
Com Bardhan was a close friend and well-wisher of AIPEF. Com Bardhan had attended many meetings and Conferences alongwith AIPEF leaders. He used to take keen interest in our struggles and activities. He was founder Convener of NCCOEEE which was formed in Jaipur in April 2000 to protect Power Sector of India.
Com Bardhan was a multi-faceted leader – a great scholar, an effective orator, organiser, writer, campaigner, crusader, fighter, negotiator – all in one. He was an uncompromising champion of the downtrodden and the marginalized. He was a very matured and seasoned political leader..


UJJAIN URBAN DISTRIBUTION FRANCHISEE - MISREBALE FAILURE Dt:2-01-2016

Urban Distribution Franchisee has misrebaly failed in Ujjain & power distribution of Ujjain has again been taken by Govt DISCOM on first day of 2016.

"The status quo be maintained till next hearing," stated the court order issued on October 29, 2015, the copy of which was received on Thursday night. The next hearing will take place on December 3.
Three years back, the state government-run MP West Zone Electricity Distribution Co Ltd (west discom), which supplies electricity to Indore and Ujjain division, had granted license to Essel Vidyut Viratan (Ujjain) Pvt Ltd to supply electricity, issue bills and collect payment in Ujjain city.
On October 1, 2015, west discom MD Akash Tripathi issued it a termination notice on the ground that the licensee, "failed to meet standards of performance and consumer service as laid out in agreement."
Later, west discom took over the management and operation of electricity supply to Ujjain city from the licensee. Consequently, the latter moved High Court seeking stay on termination of its services.
According to Tripathi, the discom issued the notice after several reminders wherein the licensee was told to improve its performance, especially in view of Simhastha fair to be held in April-May next year.
Essel Vidyut Viratan (Ujjain) Pvt Ltd is part of Essel group founded by business tycoon Subhash Chandra in 1976.


rooftop solar projects Dt:2-01-2016

Govt to spend Rs5,000 crore on rooftop solar projects.

New Delhi: To encourage the use of renewable energy, the cabinet on Wednesday promised to spend as much asRs.5,000 crore in five years to build rooftop solar power projects and connect them to the national electricity network.
The effort to support the installation of 4,200 megawatts (MW) solar rooftop systems under the National Solar Mission by 2019-20 is a substantial increase from the earlier budget of Rs.600 crore.
The government will provide a capital subsidy of 30% to the states and Union territories for this purpose.
The subsidy will increase to as much as 70% for some special category states such as Uttarakhand and those in the North-East.
There will be no subsidy for private commercial establishments since they are eligible for other benefits such as accelerated depreciation, custom duty concessions, excise duty exemptions and tax holidays, the government said in a statement.
Houses, government offices and social and institutional sectors such as hospitals and educational institutions are expected to create the capacity of 4,200MW.
“The industrial and commercial sector will be encouraged for installations without subsidy,” the statement said.
The government hopes that its support for 4,200MW will have a multiplier effect and will create a larger market, build the confidence of the consumers and enable the balance capacity through private investments.
The government’s focus till now has been towards big solar projects and, therefore, any step to increase solar rooftop projects is welcome, experts said.
“The potential of decentralizing solar power in India is huge. This is a welcome step,” said Arunabha Ghosh, chief executive at the Council on Energy, Environment and Water, a Delhi-based think tank.
“But much more clarity is needed on solar rooftop policy like net metering,” Ghosh said.
The government has substantially raised the scope of the solar mission from 20,000MW to 100,000MW by 2022. Of the 100,000MW, at least 40,000MW will come from rooftop solar systems.
At present, the sanctioned and approved grid-connected solar rooftop capacity is 2,080MW. The government hopes higher solar capacity will result in the abatement of about 60 million tonnes of CO2 (carbon dioxide) per year and contribute to the efforts being taken to tackle climate change.
The Narendra Modi administration has been pushing for solar rooftop panels as it believes there is a large potential for generating solar power using the unutilized space.
So far, 26 states have notified regulations to provide net metering facilities to support solar rooftop installations.
It is currently possible to generate solar power from solar rooftop systems at about Rs.6.50 per unit, which is cheaper than diesel generators and the cost at which distribution companies sell power to industrial, commercial and high-end domestic consumers, the government says.
The cabinet also took note of the administrative arrangements for implementing the India-Australia civil nuclear cooperation agreement that came into force on 13 November.
The fuel supply arrangements with Australia will bolster energy security by supporting the expansion of nuclear power in India.
This year has been significant for India’s nuclear sector.
During Japanese Prime Minister Shinzo Abe’s India visit earlier this month, the two countries ironed out on a civil nuclear agreement that has been pending for five years.
There was also significant progress with Russia and France on civil nuclear cooperation during the year.
Also, the implementation of the civil nuclear cooperation agreement with the US was put back on course after US President Barack Obama’s meeting with Modi in January and their concerns regarding India’s civil nuclear liability law were addressed.
Now, commercial negotiations between Nuclear Power Corp. of India Ltd and Westinghouse for the construction of six units of the nuclear power plant at Mithi Virdi, Gujarat, are on course for finalization in 2016.
To boost the ‘Make in India’ campaign in textiles, the cabinet committee on economic affairs approved the introduction of an amended technology upgradation fund scheme, which is expected to attract investments of Rs.1 trillion, and create over three million jobs.
The scheme is expected to provide employment to women and promote better technology in looms.
A budget provision of Rs.17,822 crore has been approved, of which Rs.12,671 crore is for committed liabilities under the ongoing scheme, and Rs.5,151 crore is for new cases, said a cabinet statement.
The cabinet also gave its approval to an agreement between the ministry of urban development and New York-based Bloomberg Philanthropies for the latter to act as a knowledge partner for the development of smart cities.
As the knowledge partner, Bloomberg Philanthropies will assist the ministry in managing the cities and provide assistance to mayors and other leaders in improving urban infrastructure and enabling public sector innovation.
In yet another decision, the cabinet approved the signing and ratification of an agreement for the exchange of tax information between India and the Maldives. The agreement will stimulate effective exchange of information between the two countries, which will help curb tax evasion and tax avoidance.
The cabinet also approved the signing of a protocol amending the convention between India and Slovenia for avoidance of double taxation and prevention of tax evasion.
The cabinet gave its approval to the renewal of an agreement between India and Canada for cooperation in higher education, that is expected to intensify existing partnerships between the two countries in the field of higher education.


"Power surplus Punjab " Boon or bane Dt:30-12-2015

Power surplus Punjab Boon or bane

CHANDIGARH : The thermal plants of Punjab used to be a matter of pride for the PSPCL as they won numerous national awards for their outstanding performance and now these are struggling for their survival as their units have been put on forced shut down to pave the way for power purchase from private sector thermal plants .
The Punjab power generation policy was announced by the government in June 2010 to facilitate accelerated addition of power generation capacity to meet the increasing electricity demand and higher growth rate. It was decided to two new thermal plants 1980 MW Talwandi Sabo and 1320 MW Rajpura thermal in private sector and a large number of incentives were extended to private parties.
It is a matter of debate what went wrong with the power generation policy whose aim was to transform the state from power deficit to power surplus state by encouraging private developers for setting up power plants and to supply power at affordable rates. The power generation policy has failed to bring down cost of power and led to forced closure of thermal units of state sector thermal plants as power is surplus in the state. Consumers will have to bear the brunt of fixed charges of private sector thermal plants for not fully utilizing their available power as per power purchase agreements.
The downfall of state run thermal plants started with the commissioning of two thermal plants units in the state by the private sector . Though with the coming up of new plants has made Punjab a power surplus state but tragedy is that Punjab is neither able to consume surplus power within state nor sell the power to other deficient states.
PSPCL is supposed to purchase power even by keeping its own plants idle or pay compensation of Rs 2,700 crore every year to private thermal plants as fixed charges even without purchasing a single unit. The reduction of public sector power generation to about 9,500 million units in 2015-16 as compared to 16,500 million units in 2012-13.
This may be mentioned that Lehra Mohabbat thermal plant generated an ever highest 76,21MU with a plant load factor of 94.31 per cent during 2011-12 was the highest among all state sector power plants of the country. Similarly Ropar thermal plant generated record 9717 MU in the year 2011-12.
The plant load factor of thermal plants at Lehra Mohabatt and Ropar used to hover around 90% and above has come down so much that the thermal employees are often denied monthly generation incentive. The plant load factor of Ropar and Lehra Mohabatt thermal plants in the state for the current financial year up to period ending November has come down to 45.13% and 47.77% respectively .PSPCL ,however , has projected these figures as 55.65% and 56.61% in the ARRR for 2016-17, the figures may not be achieved The total generation of 1400 MW Rajpura thermal plant in the current financial year up to ending November is 4990.8 MU with plant load factor of 60.88 % against last year's generation of 4153.9 MU. Similarly 660 MW Talwandi Sabo thermal unit for the period of March to November is 1744 MU against last year generation of 461 MU during corresponding year.
PSPCL’s own generation has decreased drastically even against its own assessment in ARR submitted to PSERC last year which means PSPCL has now become a junior partner in generation of power in with the commissioning of upcoming power stations in the State.
The cost of power procured is more than cost of generation at PSPCL’s own thermal plants. Average variable cost for all tree thermal plants in state is Rs 2.63 per unit .with Lehra Mohabatt thermal plant having the least generation cost of Rs 2.36 per unit.
PSPCL has calculated the variable cost considering the variable charges as Rs. 2,60 per unit for Rajpura TPS and Rs. 2.22 per unit for Talwandi Sabo TPS (TSPL) The fixed cost for the Rajpura TPS and Talwandi Sabo TPS has been calculated by PSPCL based on the fixed charges as Rs. 1.36. per unit and Rs.1.35 per unit respectively The per unit supply cost from private sector plants increases after adding the fixed charges payable for not utilizing the generation as per power purchase agreement..
Despite power surplus , the over dependence on private sector for power generation in Punjab is neither good for the grid security nor for the general consumers .


' U TURN ' ON NUCLEAR POLICY Dt:30-12-2015

Govt to sign nuclear damages pact

New Delhi Convention For Supplementary Compensation Will Be Ratified By Mid-Jan The government is getting ready to ratify the international Convention for Supplementary Compensation (CSC), capping a year of surprising successes in nuclear energy in India, which ended with Parliament passing the joint venture bill for nuclear projects.
India is confident it will keep its promise to US President Barack Obama and ratify the CSC by mid-January .Once ratified, it will add to the pool of compensation for nuclear damage. Last week, the government informed Parliament that the Indian Nuclear Insurance Pool (INIP) with a capacity of Rs 1,500 crore was launched on June 12, 2015 to provide insurance to cover liability as laid down in the controversial Liability Act (2010).
“In addition to providing coverage for operator's liability, INIP will also address liability-related concerns of suppliers under the CNLD Act,“ the MEA said. Sources also said the operator, NPCIL, will take out the first insurance policy in the com ing weeks, opening the road for suppliers to take out insurance policies. In another reply in Parliament, the MEA once again clarified that while the liability of the supplier will be according to Section 17 of the CLND Act along with Rule 24, “the operator's right to recourse against the supplier will be as per the contract entered“.
The government has said the supplier holds “no liabil ity to pay compensation for nuclear damage in the first instance to the victims of a nuclear accident“. That liability rests solely with the operator -in this case, NPCIL.
In December, Canada sent the first uranium consignment of 250 tonnes to India for its nuclear reactors, a major achievement. This year, when the world focused on cleaner energy , India also completed nuclear agreements with Australia and Japan. Although Japan still has to clear the deal through its Parliament, it has major implications not only for India's nuclear power, but for a strategic relationship with Japan.
For starters, it will make it easier for Toshiba-Westinghouse to advance negotia tions with the Indian government for 6 nuclear reactors.The early works agreement, said sources, has already been implemented and the two sides are working on a commercial contract scheduled for the first half of 2016.These would be the AP-1000 reactors that Westinghouse has sold to China. Meanwhile, following an agreement between L&T and Areva, the Indian company is reportedly in the process of a major upgrade of its Hazira facility for nuclear equipment manufacture.
While international focus has been on solar energy , sources say , India could be on a fast track to add significant amount of nuclear power to its energy mix.


Power Minister discusses Electricity Bill with NCCOEEE Dt:24-12-2015

The state governments will have option to go with only government supply companies for power supply Yogindra Mohan
Patiala

The Central government has informed a delegation of National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) that separation of carriage and content in power distribution as per proposed Electricity Bill 2014 shall not be binding in nature for the states. The government agreed to consider a number of suggestions put forth by a delegation of the NCCOEEE which held hour-long discussions with Piyush Goyal, Union Power Minister, and other officials at New Delhi on Monday on the various provisions of Electricity (Amendment) Bill, 2014.
The NCCOEEE delegation was led by Shailendra Dubey, chairman of All India Power Engineers Federation (AIPEF), and included PN Choudary, P Rathnakar Rao, Mohan Sharma, G K Vaishnav, Kuldeep Kumar, Subhash Lamba and R M Sharma. V K Gupta, a spokesperson of AIPEF, said that a detailed meeting with the Union Power Ministry officials will be held in January 2016 to be followed by another meeting with the Union Power Minister. Piyush Goyal also agreed to participate in the general body meeting of NCCOEEE in February to listen to the suggestions for the improvement of power sector. It was assured by the minister that the Electricity Bill 2014 will be finalised for presentation in Parliament only after detailed discussion with power sector employees and engineers. The exact changes in the proposed bill will be made available in writing by the Ministry of Power only after the Cabinet’s approval. V K Gupta said that it has been assured by the government that the proposed Electricity Amendment Act shall be enabling provision and not mandatory on states. Further no cherry picking will be allowed and all power supply companies including private shall have universal power supply obligation.
The state governments will have option to go with only government supply companies for power supply and there would be no compulsion of opting for private supply companies


Power minister discusses Electricity Bill with NCCOEEE delegation Dt:22-12-2015

Power minister discusses Electricity Bill with NCCOEEE delegation

The Government informed the delegation of National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) that separation of carriage and content in power distribution as per proposed Electricity Bill 2014 shall not be binding in nature for the states.
The Government agreed to consider a number of suggestions put forth by a delegation of NCCOEEE which held hour long discussion with Union Power Minister, Piyush Goyal and other officials at New Delhi on Monday on the various provisions of Electricity (Amendment) Bill 2014.
NCCOEEE delegation was led by Shailendra Dubey, Chairman, All India Power Engineers Federation (AIPEF) and included P.N. Choudary, P. Rathnakar Rao, Mohan Sharma, G.K.Vaishnav, Kuldeep Kumar, Subhash Lamba and R.M. Sharma.
V.K. Gupta, a spokesperson of AIPEF said that a detailed meeting with power ministry officials will be held in January 2016 to be followed by another meeting with Union Power Minister. Piyush Goyal also agreed to be participative in a general body meeting of NCCOEEE in February to hear the suggestions for the improvement of power sector.
It was assured by the minister that Electricity Bill 2014 will be finalized for presentation in Parliament only after detailed discussion with power sector employees and engineers. The exact changes in the proposed bill will be made available in writing by the Ministry of Power only after Cabinet approval.
The AIPFE spokesperson said that it has been assured by the Government that the proposed electricity amendment act shall be enabling provision and not mandatory on states. Further cherry picking will be allowed and all power supply companies including private ones shall have universal power supply obligation.
State Governments will have option to go with only Government supply companies for power supply and there would be no compulsion of opting for private supply companies. State Governments will have to notify their road map in 5 yrs time after enactment of Act for segregation of carriage and content without any time limit for implementation.
NCCOEEE delegates told the Power Minister that they are opposed to various clauses of the Bill particularly segregation of carriage and content, which will pave path for privatization of profit making industrial, commercial and other high end power consumers. Thus state supply companies will by default become supply company of loss making consumers, which is not in the larger interest of the nation.


Slowdown Signals: In power sector, signs that growth not plugging in Dt:21-12-2015

Slowdown Signals: In power sector, signs that growth not plugging in

The government’s mid-year economic review may have painted an uncharacteristically sobering picture, but the bigger worry could be the absence of credible signs of a recovery getting underway in the domestic economy. If the real-time status of project development on the ground were to be taken as a measure, the picture that emerges is in sharp contrast to the narrative of an impending industrial uptick. What makes the prognosis grimmer for core sectors such as power, a key enabler for fuelling a rebound in the economy, is the worrying drop in private sector interest in setting up new projects.
In 2010, for instance, a total of 46 power generation projects were granted transmission connectivity — a key milestone for a power project that entitles the generation plant to get hooked on to the country’s electricity grid. This number is down to just two projects each in 2014 and in the first eleven months of 2015, a reflection of the dwindling investor interest.
Worrying still is the fact that the two thermal projects granted connectivity in 2015 were both in the public sector, as compared to 35 private projects in the list of 46 granted connectivity five years ago. This sharp drop in the number of projects moving towards the final stages of commissioning is bound to show up in the form of supply shortages, as and when the economy were to pick up. There are sector-specific issues that are proving to be a drag in sectors such as power generation. Demand is worryingly stagnant, a situation aggravated by the continuing industrial slowdown and thermal power plants, the mainstay of the Indian electricity grid, being forced to operate at a plant load factor of 60 per cent — a 10-year low — as distribution companies (or discoms) do not have the money to pay for buying more power.
Of the country’s total installed generation capacity of 2,68,603 MW, the peak demand met at the height of summer this year — May 23, 2015 — was less than half at just 1,34,892 MW.
Over 57 base-load thermal units across India’s northern and western heartland on that day were faced with ‘reserve shut-down’, a technical term for a unit shut down due to lack of demand.
Reflecting the low actual off-take, data from the central electricity regulator or CERC on traded power price shows a consistent drop in volumes since 2009 — a direct consequence of the fact that capacity addition grew at 13.7 annually in the three years to 2015 even as consumption grew at a measly 6 per cent.
In the northern region, at this time of the year, states such as Uttar Pradesh, Haryana, Punjab and Rajasthan are having to back down generation due to lack of demand. A vast majority of power generation projects are currently distressed because either their tariff is prohibitive or theThere are sector-specific issues that are proving to be a drag in sectors such as power generation. Demand is worryingly stagnant, a situation aggravated by the continuing industrial slowdown and thermal power plants, the mainstay of the Indian electricity grid, being forced to operate at a plant load factor of 60 per cent — a 10-year low — as distribution companies (or discoms) do not have the money to pay for buying more power.
Of the country’s total installed generation capacity of 2,68,603 MW, the peak demand met at the height of summer this year — May 23, 2015 — was less than half at just 1,34,892 MW.
Over 57 base-load thermal units across India’s northern and western heartland on that day were faced with ‘reserve shut-down’, a technical term for a unit shut down due to lack of demand.
Reflecting the low actual off-take, data from the central electricity regulator or CERC on traded power price shows a consistent drop in volumes since 2009 — a direct consequence of the fact that capacity addition grew at 13.7 annually in the three years to 2015 even as consumption grew at a measly 6 per cent.
In the northern region, at this time of the year, states such as Uttar Pradesh, Haryana, Punjab and Rajasthan are having to back down generation due to lack of demand. A vast majority of power generation projects are currently distressed because either their tariff is prohibitive or the


Political will must for plan to succeed, say power engineers Dt:16-12-2015

Manish Sirhindi
Tribune News Service
Patiala, December 16

While the state government has accepted the financial bailout package offered by the Union Government to make up for losses suffered by state power distribution companies over the past few decades, power engineers are of the view that it would be difficult to implement the terms and conditions of the same in the absence of political will. The state had earlier twice refused to accept the bailout package in the past 13 years. VK Gupta, a spokesperson for the All-India Power Engineers Federation (AIPEF), said while it was being claimed that this bailout plan was different from two similar financial restructuring plans offered earlier, it was also linked to various performance-related parameters, which distribution companies will have to meet so that it succeeds. He said the bailout package was technically achievable, but was politically challenging as vote politics held penchant over power reforms. He said state power engineers were not been engaged in discussion to solve the problems being faced by the Discoms, even as the decisions taken by the government were to be implemented by them. He said while improving operational efficiencies and repackaging the debt were necessary to improve the finances and cash flows of Discoms, it would need a credible action plan for the bailout package to succeed.


BJP questions Akhilesh's claims on power sector Dt:16-12-2015

The Bhartiya Janta Party on Wednesday questioned the claims of Chief Minister Akhilesh Yadav on Uttar Pradesh making giant strides in the power sector.

A day after Akhilesh Yadav laid the foundation stone of a 660 MW power plant in Harduaganj, Aligarh, state spokesman Vijay Bahadur Pathak sought to know who was bearing the cost of the project and how much money was going into the thermal power project.
Pointing out that the state government, after the Mumbai investors summit earlier this year, had claimed that Japanese firm Toshiba was investing Rs.3500 crore in the Harduaganj power project. This was turning out to be an investment by the government itself and that Toshiba was only the executing agency, he added.
Alleging that despite the perception being "so painfully and dramatically" created by the state government of lot of work being done in the power sector, the ground realities were "abysmal and completely in contrast", the BJP leader told IANS.
Citing promises made by the ruling Samajwadi Party (SP) in the 2012 election manifesto of 22-hour power supply in cities and 16 hours supply in villages by 2016, Pathak said the reality was that power theft accounted for Rs.21 crore every day and that line losses had punctured the power sector beyond repair.
"As per statistics submitted to the Electricity Regulatory Commission for the year, power theft added up to Rs.625 crore every month in UP, is this progress in the power sector that Akhilesh Yadav is speaking about," he questioned.
He also accused the government of trying to hoodwink the people of the state on a number of MoU's signed during Agra and Mumbai investors meet while there was very little follow up on most of them.


State Electricity Regulator Commissions beset by vacant posts: Study Dt:16-12-2015

Of the 66 posts, 13 are vacant, says study done by Ahmedabad-based Consumer Education Research Society

The UDAY power distribution reform plan for states could falter at the regulatory level. Of the 66 posts in 22 state electricity regulatory commissions (SERCs), 13 are vacant. Three major states –Gujarat, Maharashtra and West Bengal — don’t even have a chairperson.
The West Bengal SERC is effectively defunct due to lack of quorum as it has only one member on its board. The Gujarat SERC was defunct from August to December 2015 as the quorum of board was incomplete. A SERC should have at least three members for it to function, according to the Electricity Act, 2003.
A study by Consumer Education Research Society based in Ahmedabad revealed key posts of members in SERC board are vacant. The post of member (technical) is vacant in three states - Chhattisgarh, Jharkhand and Tamil Nadu. The post of member (finance) is vacant in Assam, Haryana, Jammu & Kashmir, Goa, Punjab, Uttar Pradesh, and West Bengal.
The report also highlighted that the post of member (technical and finance) does not meet the stipulated criteria in most of the states as suggested in the Electricity Act. It said only Andhra Pradesh and Jharkhand have chairpersons from judiciary. Ten chairpersons are from Indian Administrative Service (IAS) and four from Indian Forest Services (IFS) cadre. The remaining three are postgraduates — two in science and one in English.
Section 84 of the Electricity Act, 2003 mentions, “The Chairperson and the Members of the State Commission shall be persons of ability, integrity and standing who have adequate knowledge of, and have shown capacity in, dealing with problems relating to engineering, finance, commerce, economics, law or management.” For the post of the chairperson, the Act recommends retired or sitting High Court judges.
However, as the provisions of the Act are only guiding principles and not mandatory, most of the states choose to bypass the same. In earlier representation to the power ministry, which is drafting amendments to the Electricity Act, the study suggested that the government replace the word “may” with “shall”, making it mandatory for state governments to appoint retired or sitting High Court judges.
Section 84 (2) of Electricity Act states, “Notwithstanding anything contained in Sub-section (1), the State Government may appoint any person as the chairperson from amongst persons who is, or has been, a Judge of a High Court.”


Transmission corridors' progress faces hurdles Dt:16-12-2015

The power ministry has asked states to lay transmission lines through cables along highways

The Centre’s move to fast-track development oftransmission corridors across the country faces major hurdles on account of delays in allotment of right of way (RoW) by states and higher compensation demand by land owners, among others. Some states also seek thepower to divert forest land for transmission projects.
In order to avoid delay and cost over-run, Gujarat suggested that the central and state transmission utilities be allowed to implement transmission system under regular tariff mechanism instead of mandatory competitive bidding process.
However, during their recent interaction with the Union power ministry, some other states — Karnataka, Kerala, Maharashtra, Mizoram, Odisha, Uttar Pradesh, Uttarakhand and Assam - preferred the competitive bidding route.
The ministry has asked states to consider laying of transmission lines through cables by the side of national highways to avoid RoW.
A power ministry official told Business Standard, “Transmission lines pass through hundreds of kilometres and require RoW. The CEA (Central Electricity Authority) had prepared a perspective transmission plan for 2014-2034 based on peak load growth of 284 Gw and generation capacity of 469 Gw by the end of the 13th Plan. Karnataka, Kerala, Maharashtra, Mizoram, Odisha, Uttar Pradesh, Uttarakhand and Assam have been asked to help in resolving RoW issues.
The transmission corridors as far as possible be arranged by the side of the highways to minimise the problem of RoW.”
The power ministry official said the states also raised the issue of compensation. According to the recent guidelines by the power ministry, compensation for tower base area will be provided at the rate of 85 per cent of land value (as determined by the district magistrate or any other authority based on circle rate/guidelines value/stamp duty rates). Fifteen per cent of the land value will be made towards corridor payment. The ministry has said it’s for states to consider alternative modes of compensation by the corporation or municipality concerned.
The official cited above said states, especially Karnataka, argued the rates for compensation prescribed in the guidelines were not practicable and would vary according to the location of the line. Land owners near cities might not agree to the 15 per cent RoW compensation.
The official said states were told to frame their own rules to give higher compensation. However, this could increase the overall cost of transmission, which might be considered by the regulatory commissions while fixing the tariff.


Power Sector Reforms: The story of UDAY so far Dt:12-12-2015

DISCOM Assurance Yojana or UDAY for short. The scheme has certain salient features that will help India's growing power sector face one of its most challenging problems.

The scheme comes forth at a time when DISCOMs have seen accumulated losses soaring to 3.8 lakh Crores and an outstanding debt of approximately Rs. 4.3 lakh Crore (as on March 2015). Just to put these numbers in perspective, the outstanding debt is close to twice the defence budget of the country at present. A question that naturally arises is what made things come to such a pass? The fact is DISCOMs have been facing problems for a long time now. However, the financial problem that DISCOMs have been facing became acute in the past 4-5 years as they began funding their operational losses by taking on more debt. Debt restructuring for DISCOMs have happened in the past but this time, it appears the government is keen on finding a long-term solution to the problem. Debt at present comes with interest rates hovering as high as 15%. This high interest cost has trapped DISCOMs in a vicious debt cycle. Due to this the banks, have seen their NPA's rise that is a cause of concern for both the banks and the RBI.
The scheme thus comes at an opportune time and tries to resolve these legacy issues of the Power sector in the next 2-3 years by a four-pronged approach.
First, it seeks to improve the operational efficiencies of the power DISCOMs. It is proposed to be done through proper metering, up-gradation to energy efficient modes like usage of LED's the prices for which have already seen a tremendous downward spiral. Prices of LEDs have seen a tremendous downward spiral due to the removal of supply-side bottlenecks and with that economies of scale bringing prices further down. The measures to improve operational efficiency are done with a view to reducing the average AT&C losses from the present 22 percent to a target of 15 percent by 2018-19.
Second, the scheme proposes a reduction in the cost of power. It is a step that would require improvements across the upstream side of value chain right from the fuel supply to improvements in generation technologies and betterment in the existing and addition of new transmission line infrastructure. The government is keen to bring in improvements in these. In the previous year, the power sector has seen the highest production growth in coal sector as well as the highest capacity addition in the generation and highest ever transmission line additions.
Third, the scheme seeks to reduce the interest cost of DISCOMs. It is to be done by asking states to take over 75 percent of the debt of DISCOMs as on 30 September 2015. The 75 percent debt is in line with the recommendations of the Fourteenth Finance Commission. The scheme proposes it to be done in 2 Phases- the first 50 percent to be taken over in 2015-16 and the rest 25 percent to be taken over by 2016-17. It is expected that this will reduce the interest cost by an estimated 6-7 percent thus disrupting the debt trap in which the DISCOMs seem to be stuck at present.
Finally, the scheme seeks to enforce financial discipline in DISCOMs by aligning them with states' finances. The initial years will see the fiscal space remaining the same for states even when they take over the debts. It is to be done by ensuring that for the initial two years evaluation of debt in the fiscal deficit does not take place. Also, the scheme proposes to make the states accountable by giving them the power to take over and fund at least 50 percent of the future losses (if any) of the DISCOMs in a graded manner.
The scheme is optional and has so far seen has seen enrolment by nine states according to the official Twitter handle of the Power Minister. The scheme overall seems well thought through and is not just a restructuring package but a major reform that will help secure power for all citizens. In the process, it is hoped it will forever change the dynamics of DISCOMs in the country. Other sectors need to bring in such 'reforms' to make the states and well as India globally competitive.


Punjab becomes 7th. state to join " UDAY " . Dt:10-12-2015

Punjab became the seventh state to join the government of India scheme “UDAY” to set right the stressed loans of Punjab State Power Corporation Limited (PSPCL)

Earlier in the last one week Andhra Pradesh , Jharkhand , Rajasthan ,Himachal Pradesh, Uttrakhand and J&K had joined the scheme. Punjab had not joined the last financial restructuring scheme launched by Government of India in 2012.
As per the scheme, state governments are to take over 75 per cent of the debt of Discoms as on September 30 in two years and payback lenders by selling bonds. For the remaining 25 per cent, Discoms will issue bonds. The scheme is optional and gets operationalised by signing a pact state, state Discoms and the centre.
It has been claimed by the government that the Scheme UDAY has been launched to improve financial and operational efficiencies of power distribution companies . Further it envisages to reduce interest burden, cost of power and AT&C losses. This is yet another attempt to bailout power sector distribution companies through financial restructuring of stressed loans.
Piyush Goyal union Power Minister tweeted that he met all the heads of banks with exposure to Discoms and all banks are fully participating in the scheme.
V K Gupta Spokesperson of All India Power engineers federation said that the failure of last two financial packages announced by the previous governments lied in the lack of political will to check the menace of power theft , end the free / subsidised supply to different set of consumers . This is a reality in most jurisdictions of the loss-making distribution companies irrespective of ruling political party of the state.
Many states are apprehensive on taking the debt on their books but they have no choice. It may be mentioned that most of the trouble of Discoms is because of political reasons that the states do not allow them to raise tariff in line with the cost. Key to the success of the scheme is acceptance and implementation by state governments.


Cabinet may take up power tariff policy this week Dt:08-12-2015

The policy lays down regulations for setting power tariffs by asking electricity regulators to 'necessarily' be guided by the new policy while framing regulations

The amendments to the national tariff policy for electricity are likely to be placed in the Union Cabinet this week. After the announcement of the Ujjwal Discom Assurance Yojana (UDAY), the Centre is likely to tighten regulations to help in the execution of the scheme. The policy lays down regulations for setting power tariffs by asking electricity regulators to ‘necessarily’ be guided by the new policy while framing regulations under Section 61 of the Act. Earlier, the state regulators would not abide by regulations and twist it according to their requirement, said a former member of Central Electricity Regulatory Commission (CERC). “Now, the state regulators would have to remain in the perimeter of the policy. It would be binding on them to take regulatory decisions as per the amended policy and not as per need.” Among the major additions to the objective of the policy are promotion of renewable generation sources and creating more competition, efficiency in operations, and improvement in quality of power supply. To incentivise distribution companies to procure power from renewable sources of energy, the Centre is likely to notify, from time to time, an appropriate bid-based tariff framework for renewable energy. The tariff policy has recommended a set of 30 amendments in the existing tariff policy, which was formed as a continuation of the National Electricity Policy, 2005. In a first, the draft also underlines norms for ancillary services. CERC has been given the right to introduce the norms and framework for ancillary services necessary to support the power system or grid operation for maintaining power quality, reliability and security of the grid, including the method of sharing the charges. The government has also suggested an increase in fuel cost on account of import to be included in the tariff structure. “In case of reduced quantity of coal supplied by Coal India, vis-à-vis the assured quantity of 85 per cent, the higher cost of imported/market-based e-auction coal for making up the shortfall, shall be considered for being made a pass through by CERC/SERCs (state electricity regulatory commissions), on a case-to case basis, to the extent of shortfall,” said an amendment to the policy. Other major components such as foreign exchange fluctuations, cost of land acquisition and other clearances should have been part of the tariff calculation, but it has been completely ignored, said a senior power sector executive. “Projects stuck for these reasons will continue to remain stranded.” Power generators have, however, been given the freedom to sell surplus power in the spot market if the beneficiary doesn’t give two days’ notice. The notice period was 10 hours earlier.


GAIL moots shutting of coal based power plants near metros Dt:08-12-2015

New Delhi: Amidst raging debate over rising levels of air pollution, state-owned GAIL India on Monday mooted shutting down of coal-based power plants near metro cities and switch to cleaner gas as a source of electricity generation.
GAIL Chairman and Managing Director B C Tripathi said besides Badarpur power plant in Delhi, the nearby Dadri station too needs to be shut. “All thermal (coal) based plants in big cities and metros have to be looked into (for closure),” he said at the World Energy Policy Summit here. Delhi, the world’s most polluted city, last week decided to shut down the Badarpur and Rajghat thermal power stations to check pollution.
It also plans to restrict the number of cars on its roads by implementing license-plate based driving bans allowing vehicles with license plates ending with odd and even numbers to ply on alternate days starting January 1. “Badarpur is second most inefficient plant in the country,” Tripathi said adding if it can be shut, so can Dadri power station of NTPC in the neighbouring Ghaziabad district.
He also cited the presence of a 30-year-old coal-based power plant near Mumbai as an example of polluters that need to be looked at. Delhi, he said, also has a gas-based power plant at Bawana which is shut. “Bawana is most efficient plant in the country but it is shut.” Starting Bawana does not need gas but a policy framework that encourages use of cleaner fuel and allows absorption of electricity generated from it in the system, he said.
“We need to have a clear cut integrated policy,” he said adding CNG network in the national capital was operating at one-third of capacity, implying not all were using the cleaner fuel for cooking and transportation purposes. He said until power sector reforms are initiated, 25,000 MW of idling capacity cannot be brought into the system. “There also has to be some kind of penalty for polluting fuels,” he said adding power generation from diesel or other liquid fuels should be discouraged.
Crude oil, which is considered a pollutant, is allowed to be imported duty free in the country. In contrast, a 5 per cent import duty is levied on natural gas - a cleaner and less polluting fuel.
Natural gas attracts 25 per cent sales tax and states like Madhya Pradesh levy on natural gas, he said adding the landed price of imported liquefied natural gas (LNG) of $8 per million British thermal unit becomes $12 for customers mostly because of central and state taxes. “As a country we have not been able to manage gas properly,” he said.


Rajasthan joins Centre's power discom recast scheme Dt:08-12-2015

The state has recorded the highest discom losses. At present, it owes Rs 85,000 crore to lending institutions

One month after the Union government announced its financial restructuring plan for state power distribution companies, Rajasthan on Monday became the third state to join the scheme. Earlier, Andhra Pradesh and Jharkhand had joined the scheme.
The scheme is the first move of the National Democratic Alliance (NDA) government to set right the power distribution sector through restructuring of stressed loans in the business. The restructuring plan was approved last month. "Congratulations to CM of Rajasthan Smt. @VasundharaBJP on the state joining UDAY (Ujwal DISCOM Assurance Yojana)," said Power Minister Piyush Goyal in a tweet.
The Vasundhara Raje-led Bharatiya Janata Party (BJP) government in Rajasthan had held a summit last fortnight to attract global investments in the state. CS Rajan, chief secretary of the state, had told Business Standard the state was ready to join the scheme and take over half of the total debt of the state's power distribution companies as on March 31, 2015 and the rest 25 per cent by next financial year (2016-17).
Rajasthan has recorded the highest discom losses. At present, the state owes Rs 85,000 crore to lending institutions. The state, along with other loss-making states, has already been put on notice by the Reserve bank of India (RBI) to clear its debt or be debarred from receiving financial aid. Rajasthan has the highest debt of Rs 85,000 crore among states followed by Tamil Nadu's Rs 70,000 crore and UP with Rs 32,000 crore.
As per the scheme, state governments can take over 75 per cent of the debt of discoms as on September 30 and payback lenders by selling bonds. For the remaining 25 per cent, discoms will issue bonds. This would help clean up the cumulative debt of Rs 4.3 lakh crore accumulated on state-owned utilities and bring relief to lenders.
For the next two financial years, the centre will not include the debt taken over by the states in the calculation of their fiscal deficit, which could have gone up by as much as Rs 3.2 lakh crore.
States are suggested to take over 75 per cent of discom debt over two years - 50 per cent in 2015-16 and 25 per cent in 2016-17. Discoms' debts, which are not taken over by the state, will be converted by the banks and financial institutions into loans or bonds with interest rate not more than the bank's base rate. Alternately, this debt might be issued by the discom as state-guaranteed discom bonds at the prevailing market rates.


Andhra becomes first state to enlist in Centre's debt restructuring for power distribution Dt:06-12-2015

Rajasthan is also likely to join the scheme shortly.

Exactly a month after the Union government came out with a financial restructuring scheme for power distribution companies, Andhra Pradesh has become the first state to join it. The scheme is considered the first move of NDA government to set right power distribution through restructuring of stressed loan in the business.
The Union government had approved a financial restructuring scheme for distribution companies on November 5, 2015. "Congratulations to Hon'ble chief minister of Andhra Pradesh Shri Chandrababu Naidu for joining UDAY (Ujwal DISCOM Assurance Yojana) for turnaround of DISCOMs," Union power minister Piyush Goyal said in a tweet. "Under the leadership of Sri Naidu, Andhra Pradesh is making rapid strides across sectors. With UDAY, AP can assure 24X7 power for all," he said in another tweet.
Andhra Pradesh, in the southern grid, has acute power shortage. Naidu's Telugu Desam is part of the National Democratic Alliance that came to power at the Centre in May 2014. Under Naidu, the state had undertaken measures in the distribution segment during the first phase of power sector reforms in the 1990s.
Rajasthan is also likely to join the scheme shortly. During the partnership summit last fortnight to attract global investment in the state, CS Rajan, chief secretary of Rajasthan, had told Business Standard the state was ready to join the scheme and take over half of the total debt of the state's power distribution companies (discoms) as on March 31, 2015 and the rest 25 per cent by next fiscal (2016-17).
Rajasthan is saddled with the highest discom losses. At present, the state has a financial burden of around Rs 85,000 crore to lending institutes. The state, along with other loss-making states, is already on notice by the Reserve bank of India (RBI) to clear their debts or they will be debarred from receiving financial aid.
As per the UDAY scheme, state governments, which own the discoms, can take over 75 per cent of their debt as of September 30 and pay back lenders by selling bonds. For the remaining 25 per cent, discoms will issue bonds.
This would not only help in cleaning up debt of Rs 4.3 lakh crore accumulated on state owned distribution companies but also bring relief to lenders.
For the next two financial years, the central government will not include the debt taken over by the states in the calculation of their fiscal deficit, which could have gone up by as much as Rs 3.2 lakh crore.
Among all states, Rajasthan has the highest debt of Rs 85,000 crore followed by Tamil Nadu with Rs 70,000 crore and UP with Rs 32,000 crore.
States are suggested to take over 75 per cent of discom debt as on 30 September 2015 over two years – 50 per cent in 2015-16 and 25 per cent in 2016-17.
“This will reduce the interest cost on the debt taken over by the States to around 8-9 per cent, from as high as 14-15 per cent; thus improving overall efficiency,” Goyal had said on November 5.
Discoms debt not taken over by the state shall be converted by the banks / financial institutions into loans or bonds with interest rate not more than the bank’s base rate plus 0.1 per cent.
Alternately, this debt may be fully or partly issued by the discom as State guaranteed DISCOM bonds at the prevailing market rates which shall be equal to or less than bank base rate plus 0.1 per cent, said Goyal.
Any future losses would be taken over by the states in a graded manner. As of March 2015, the total accumulated loss is Rs 3.8 lakh crore. In its Financial Stability Report on June 2015, the RBI said the Rs 53,000-crore exposure of Indian banks to seven state electricity boards (SEBs) has a “very high probability” of turning into non-performing assets (NPAs) in the quarter ending September.
The discoms would have to reduce their Aggregate Technical & Commercial Losses (AT&C) to 15 per cent from current level by 2018-19. Business Standard reported that the central government would restrict the borrowing capacity of state owned power distribution companies (discoms) to efficiency parameters.
“Once there is improvement in working of discoms, the job of regulator becomes easy because he does not have to only increase tariff but he can balance the tariff for all category of consumers for better service,” said Pramod Deo, former chairman, Central Electricity Regulatory Commission.
The difference between average revenue realisation and the average cost of procurement would have to be brought down to zero by 2018-19. The State Electricity Regulatory Commissions (SERCs) will also do quarterly tariff revisions, said Goyal.
“The power ministry would form a MoU with the state government and the discom to perform monthly monitoring of the reforms suggested,” Goyal said.
As an incentive, the states adhering to the operational milestones will be given additional central funding through Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), Power Sector Development Fund (PSDF) or other such schemes of ministries of power and renewable energy.


Outlook for India's power sector remains negative Dt:06-12-2015

Press Trust of India

New Delhi, Dec 3 (PTI) Faced with challenges like fuel supply risks, cost overruns at private plants and financially weak discoms, India's power sector outlook remains negative, says Moody's Investors Service.
"Our outlook for the Indian power sector remains negative, because the industry faces persistent challenges, mainly resulting from high, albeit moderating, fuel supply risk, cost over-runs at some plants operated by independent power producers (IPPs), and the limited capacity to pay on the part of financially weak distribution utilities," Moody's said in a press release today.
Some independent power producers (IPPs) are also locked into power purchase agreements (PPAs) that have become unviable because they do not allow the high costs of imported fuel to be passed through, it said.
Indian power generators' capacity utilisation will likely be limited by the financial weakness of offtakers, in turn constraining off-take electricity demand, despite growing electricity demand and increasing domestic coal, it added.
For India s NTPC, its unfavourable business conditions are offset by the Indian central and state governments and the Reserve Bank of India s standing agreement to offset high offtaker risk, and the company s well secured fuel supply sources from domestic and overseas markets.
Low commodity prices will benefit Indian IPPs by making power more affordable for offtakers. However, the offtakers weak financial profiles pose a risk to timely payments to IPPs under PPAs.
Meanwhile, the high offtaker risk in India will not be addressed over at least the outlook period (next 12-18 months), as the financial profiles of offtakers will remain weak. Some state governments have also not paid all subsidies that the distribution utilities are entitled to; thereby constraining the utilities' liquidity positions.
The long-term viability of the IPPs remains uncertain, without timely tariff compensation.
"India s coal-based power generators will eventually carry additional environmental risk stemming from concerns over the future availability of ground and river water for power generation. As a result, we expect that these generators will see a gradual increase in capex to secure water, to avoid a decline in capacity utilization rat," it said.
Moody's stable outlook for the power sector in Asia Pacific (ex-Japan) is underpinned by steady demand, low input costs for most countries and transparent tariff mechanisms for some countries.
"Steady demand for electricity in most countries in the region, and low input costs under stable market structures will allow most power companies to recover capex and maintain adequate financial buffers," said Mic Kang, a Moody's Vice President and Senior Analyst.


Power distribution: govt to look at separating carriage, content Dt:05-12-2015

Ministry to push for clearing Electricity Act in winter session

NEW DELHI, DECEMBER 4: After coming out with a mechanism to clean up the balance sheets of electricity distribution utilities, next on the agenda for the Ministry of Power is legislative reforms.
The government hopes to get amendment to the Electricity Act cleared, which has been pending for clearance in Parliament since December last year, during the current session of Parliament.
One of the key changes proposed is the separation of carriage and content in the distribution sector which has been picked up from developed markets.
Such a move will facilitate giving the choice to consumers for electricity supply, as it would introduce the concept of multiple supply licensees. This was a promise made by Prime Minister Narendra Modi.
While the Government expects such a move will achieve the objectives of efficiency and protect the interest of consumers, the industry has been unsure about the proposal.

Producers’ view


Segregation of carriage and content is what the industry also wants but only after all possible complexities and contractual issues have been sorted out, said the Independent Power Producers Association of India.
The association members had also wanted the amendments to provide the private sector a fair and level playing field to participate in electricity supply to consumers.
Meanwhile, the workers in the power distribution sector represented by the All India Power Engineers Federation (AIPEF) are of the view that retail supply is the critical link for distribution utilities and segregation of carriage and content would leave such utilities to cater to only subsidised consumers.
With the Ujwal Discom Assurance Yojana, the Government has given an option for taking care of the financial distress of distribution utilities. However, the AIPEF feels that by introducing multiple supply licensees, the existing infrastructure of the discoms will be used without proper compensation.
But opposing the amendments can also cause harm to the whole discom reform process. Apart from the segregation of carriage and content, the amendments also provide for stricter monitoring of electricity regulatory commissions and improving their accountability.
A peer group monitoring will be done to ensure tariff orders are rational and do not suppress electricity rates artificially which are a major cause of financial distress for distribution utilities.
The amendments to the Electricity Act are also keenly awaited by the renewable energy industry. The proposed changes to the existing legislation gives a major thrust on renewable energy.
If the changes are approved, thermal power generators would mandatorily be required to set up renewable energy generation capacity under the Renewable Generation Obligation. Renewable energy could also be exempt from open access surcharge and distribution utilities can face stiffer penalties for non-compliance of Renewable Purchase Obligations.


Supreme Court declines interim payment of compensatory tariff to Adani Dt:04-12-2015

Shreeja Sen

New Delhi: The Supreme Court on Thursday declined to direct state-owned Gujarat Urja Vikas Nigam Ltd (GUVNL) to pay Adani Power Ltd (APL) compensatory tariff while the main case was pending in the court.
The main case arose when APL moved the apex court against an order of the Appellate Tribunal for Electricity (Aptel) to supply power to GUVNL as per its agreement in 2011. The case was admitted for hearing in 2012 and has been pending since.
Meanwhile, APL wanted a direction from the court seeking payment of compensatory tariff from GUVNL.
A bench comprising justices J. Chelameswar and Abhay Manohar Sapre said that GUVNL did not need the permission of the court to pay compensatory tariff, if it chose to. “We are of the opinion that it requires no permission from this Court. It is up to the 2nd respondent (GUVNL) to take a decision in accordance with law to the best of its understanding,” the court said in its order.
It clarified that this payment would be subject to the final verdict in the case.
The next date for this case is likely to be 6 January.
APL was to supply of 1000 megawatt of power from its plant to GUVNL as part of a power purchase agreement. However, APL terminated its agreement in December 2009. GUVNL moved the Gujarat Electricity Regulatory Commission (GERC) against this termination notice. GERC directed APL to continue supplying power in accordance with the agreement. APL’s appeal before the Aptel also went against it.


Will the government's new bill fix India's electricity problems? Power sector unions disagree Dt:04-12-2015

Unions say 20 lakh employees will participate in the biggest strike by power sector workers since 2000 if their concerns are not addressed.
Anumeha Yadav ·

Power sector unions on Wednesday deferred a one-day strike scheduled for December 8 over the Union government’s attempts to push the contentious Electricity Act (Amendment) Bill 2014 in the ongoing winter session of Parliament.
The move came after the central government initiated talks with power sector unions late on Tuesday. Piyush Goyal, the minister of state for power, assured the unions of a consultation on Friday.
Around 20 lakh engineers and workers in the power sector were expected to participate in the strike, the biggest since December 2000.
The unions are opposing the Union government’s bid to amend the Electricity Act, 2003, arguing that the proposed changes will make state power utilities bankrupt. They feel that the amendments will lead to situation where public sector utilities will have to shoulder the burden of supplying to poor consumers in remote areas, even as private players make profits in commercially viable regions using the distribution system already laid out by the government.
State power utilities are already accruing huge losses, as they sell electricity below the cost of supply. In some states, they even have to supply free electricity to farmers. These utilities record transmission and distribution losses (including pilferage) of almost 25%, which is double the global average.

Proposed changes

Power theft and non-payment of bills are common, with poor recovery even from affluent consumers. Since electricity is supplied at a loss, distribution companies lack any incentive to extend the power network. More than 27 crore people, nearly a fourth of India's population, have no access to electricity. The government claims its proposed changes will help address the problems of recovery and power theft because of the lack of accountability of public sector providers.
State governments currently issue one distribution license both for maintenance of the distribution network as well as the supply of electricity. Among the main changes, the bill seeks to segregate the power distribution network from electricity supply business. It provides for separate licenses for maintaining the distribution and for supply of electricity.
According to PRS Legislative Research’s analysis of the bill draft, the State Electricity Regulatory Commissions will grant supply licenses and consumers will choose to buy electricity from any of the supply licensees in an area.
Shailendra Dubey, chairperson of the All India Power Engineers Federation, said this change will make all the state-owned power distribution companies, or discoms, financially unviable. “Right now, public utilities provide electricity to very poor families as well as big industry,” he said. “This allows public companies to cross-subsidise operations. Once several licensees come in and retail supply is made separate from regular electricity supply, we will lose the higher-end consumers, as well as the interface with the end customers which provides revenue for the entire value chain.”
Further, the bill provides that when a company ceases to be supply licensee, or its license is suspended, electricity in an area will be supplied by a “provider of last resort”.

Levelling the field

The unions say this implies that public sector utilities will invariably be asked to be the provider of last resort, even as the bill does not provide any financial support to them for this purpose. In its report in May, the parliamentary committee on energy led by Bharatiya Janata Party MP Kirit Somaiya had recommended that this responsibility should be borne by all supply licensees, whether public or private, to ensure a level playing field.
Representatives of power sector unions had discussed the issue with power minister Piyush Goyal earlier in November in Kerala. In a public statement then, the unions said that the minister had agreed to include changes suggested by them to draft of the Bill and had said that the government will include and upload a modified version of the Bill on the ministry's website before the start of the winter session of parliament. However, this was not done, pushing the unions to call for a countrywide strike. Now, union leaders said they will decide their next course of action based on the talks scheduled for December 4.
While electricity supply across the country would not be interrupted in the event of a strike, any complaints regarding irregular supply or power cuts would not be addressed for the duration of the stir.


Outlook for India's power sector remains negative: Moody's Dt:03-12-2015

Faced with challenges like fuel supply risks, cost overruns at private plants and financially weak discoms, India's power sector outlook remains negative, says Moody's Investors Service.

"Our outlook for the Indian power sector remains negative, because the industry faces persistent challenges, mainly resulting from high, albeit moderating, fuel supply risk, cost over-runs at some plants operated by independent power producers (IPPs), and the limited capacity to pay on the part of financially weak distribution utilities," Moody's said in a press release today. Some independent power producers (IPPs) are also locked into power purchase agreements (PPAs) that have become unviable because they do not allow the high costs of imported fuel to be passed through, it said. Indian power generators' capacity utilisation will likely be limited by the financial weakness of offtakers, in turn constraining off-take electricity demand, despite growing electricity demand and increasing domestic coal, it added. For India’s NTPC, its unfavourable business conditions are offset by the Indian central and state governments’ and the Reserve Bank of India’s standing agreement to offset high offtaker risk, and the company’s well secured fuel supply sources from domestic and overseas markets. Low commodity prices will benefit Indian IPPs by making power more affordable for offtakers. However, the offtakers’ weak financial profiles pose a risk to timely payments to IPPs under PPAs. Meanwhile, the high offtaker risk in India will not be addressed over at least the outlook period (next 12-18 months), as the financial profiles of offtakers will remain weak. Some state governments have also not paid all subsidies that the distribution utilities are entitled to; thereby constraining the utilities' liquidity positions. The long-term viability of the IPPs remains uncertain, without timely tariff compensation. "India’s coal-based power generators will eventually carry additional environmental risk stemming from concerns over the future availability of ground and river water for power generation. As a result, we expect that these generators will see a gradual increase in capex to secure water, to avoid a decline in capacity utilization rat," it said. Moody's stable outlook for the power sector in Asia Pacific (ex-Japan) is underpinned by steady demand, low input costs for most countries and transparent tariff mechanisms for some countries. "Steady demand for electricity in most countries in the region, and low input costs under stable market structures will allow most power companies to recover capex and maintain adequate financial buffers," said Mic Kang, a Moody's Vice President and Senior Analyst.


Postponement of 08 Dec Strike / Work Boycott. Central Govt initiates talks on Electricity (Amendment) Bill 2014 Dt:02-12-2015

No.58 / Postponement of 08 Dec Strike / Work Boycott

1. National Coordination Committee Of Electricity Employees & Engineers (NCCOEEE) has postponed one day token strike / work boycott on 08 Dec against Electricity (Amendment) Bill 2014. Decision to postpone the strike was taken yesterday night after Central Govt initiated talks on objections of power sector employees & engineers on Bill. During talks it was also intimated by Ministry Of Power that no final decision has yet been taken by Central Cabinet on the proposed Electricity (Amendment) Bill 2014 & before taking any final decision the issue bill be discussed with NCCOEEE in detail. Ministry Of Power confirmed in writing that Sri Piyush Goyal , Minister For Power will hold talks with NCCOEEE delegates on 04th December in his office. Presently Sri Goyal is away in Paris & he will return back on 04th December morning.
2. NCCOEEE delegates told the officials that they are opposed to various clauses of the Bill particularly segregation of carriage & content which will pave path for privatisation of profit making industrial , commercial and other high end power consumers. Thus Govt supply company will by default become supply company of loss making consumers which is not in the larger interest of the nation .They said that their views were not heard by parliamentary standing committee on energy hence Central Govt should not act in haste to rush through the Bill in current session of parliament. They said that before passing any new amendment Bill Govt should review the outcome of unbundling , privatisation & franchisation of power utilities & DISCOMS and before going for any change in policy decision power employees & engineers should be taken into confidence.


more ...

Power sector employees postpone Dec 8 nationwide strike Dt:02-12-2015

Power sector employees postpone Dec 8 nationwide strike

"National Coordination Committee Of Electricity Employees & Engineers (NCCOEEE) has postponed the one-day work boycott on December 8 against Electricity (Amendment) Bill 2014," All India Power Engineers Federation (AIPEF) said in a statement today. The decision was taken after senior government officials, including Labour Secretary, had a word with the unionists and assured them of talks with Power Minister Piyush Goyal on December 4 when he returns from Paris. AIPEF spokesperson V K Gupta said that the meeting was called by Labour Secretary in which officers of Ministry of Power were also present. "During the meeting, it was also intimated by Ministry of Power that no final decision has yet been taken by the Cabinet on the proposed Electricity (Amendment) Bill 2014 and before taking any final decision, the issue will be discussed with NCCOEEE in detail", it said. The meeting was also attended by veteran trade union leader AB Bardhan and AIPEF Chairman Shailendra Dubey, among others. NCCOEEE delegates told the officials that they are opposed to various clauses of the Bill, particularly segregation of carriage and content, which will pave the way for privatisation of profit-making industrial and commercial segment. Thus, the state-run power distribution companies will by default become the supplier to loss-making consumers, which is not in the larger interest of the nation, the statement said. PTI KKS ABM ANU


12 lakh power sector employees to go on strike on December 8 Dt:30-11-2015

12 lakh power sector employees to go on strike on December 8

According to the statement, National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) has already served the strike/work boycott notice to Power Minister Piyush Goyal at Kochi on November 6 during Power Ministers' conference.
A body of power sector employees and engineers on Monday said that a day-long strike on December 8 to protest against Electricity (Amendment) Bill 2014 is unavoidable as negotiations remained deadlocked.
"... because of no response from Union Power Minister, there is a deadlock and now December 8 strike seems inevitable," All India Power Engineers Federation (AIPEF) said in a statement. About 12 lakh power employees and engineers are likely to participate in the strike.
According to the statement, National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) has already served the strike/work boycott notice to Power Minister Piyush Goyal at Kochi on November 6 during Power Ministers' conference.
Goyal had assured during discussion at Kochi that central government is making several changes in the Bill that will be placed on Internet before Winter Session of Parliament.
NCCOEEE convener A B Bardhan has reminded Goyal through a letter about his promises to redress the issues raised by workers and engineers at Kochi, but more than a week's time has elapsed and because of no response from the Union Power Minister, there was a deadlock.
AIPEF spokesperson V K Gupta said in the statement that besides opposition of power employees and engineers, central government has placed Electricity (Amendment) Bill 2014 on agenda of Lok Sabha for Winter Session.
He said the central government seems to be bent upon to pass the Bill in the ongoing session, hence power employees and engineers throughout the country have been asked to observe strike/work boycott on December 8 as a token protest.
Elaborating further, Gupta alleged, "The amendments in electricity bill are not based upon ground realities but are meant only to watch the interest of private players and will make state power utilities financially bankrupt.
"The amendments in electricity bill which seeks to segregate the power distribution network from electricity supply business is basically anti people and does not look at root cause of power sector ailments but only treat the symptoms of problems."
The multiple licensee system will help only "cherry picking" and the deterioration of the incumbent public sector licensee, which will be the only responsible for supplying electricity to the unprivileged common man, the statement said.
This simply means nationalizing the losses and privatizing the profits. The competition is possible only in a situation of surplus, not scarcity of electricity, which the country was facing, it added.


Dabhol plant starts selling power to Central Railways Dt:27-11-2015

Operations at the 1967 MW plant operated by Ratnagiri Gas and Power Pvt. Ltd have been stuck since January 2014 for want of LNG

Mumbai: Maharashtra’s Dabhol power plant has started supplying 300 megawatts (MW) to the Central Railways under a power purchase agreement, nearly a month after the central government decided to revive it.
Central Railways chief public relations officer Narendra Patil said on Thursday that supply started on the morning of 26 November.
Operations at the 1967 MW plant operated by Ratnagiri Gas and Power Pvt. Ltd (RGPPL) have been stuck since January 2014 for want of liquified natural gas (LNG). In October this year, the Union power ministry decided to revive the plant by splitting RGPPL into two separate firms, a decision later approved by the board of RGPPL. The two firms will be named Ratnagiri Power Co. and Ratnagiri Gas Co.
The Union government also decided to start power production at the plant from 1 November by ensuring supply of imported LNG at subsidised rate through the newly-created Power System Development Fund, which provides subsidy on imported LNG to power companies.
The RGPPL is a joint venture between state-owned NTPC Ltd, GAIL India Ltd, Maharashtra State Electricity Board and various financial institutions which have lent to the project. NTPC and GAIL each hold 25.51% and MSEB holds 13.51%. Various lenders hold 35.47%.
“When the decision to start production at RGPPL was taken, it was also agreed that the first instalment of 500 MW would be sold to the Railways under our power purchase agreement. The Central Railways has started buying 300 megawatts in Maharashtra,” Patil said.
The Central Railways estimates that the power purchase agreement with RGPPL would help it save up to Rs.700 crore. “We would be saving between Rs.2.50 to Rs.3.50 per unit on the power from RGPPL. It is a huge saving in our operational costs and will certainly help us invest in infrastructure development,” Patil said.
The Central Railways’ power purchase agreement with RGPPL was facilitated by Union power ministry’s decision to grant deemed distribution licensee status on Indian Railways. This decision was later endorsed by the Central Electricity Regulatory Commission. This paved way for the Railways to exploit the open access mechanism which allows a user to buy power from open market and negotiate the rates.
Before the railways was allowed to use the open access mechanism, it had to buy power from state utilities in various states and there was little scope for rate negotiation. “We have been buying power from utilities for rates as high as Rs.9 per unit. This put a huge burden on our finances and was one of the major reasons why our operating ratio shot up to 90%,” Patil said.
The Central Railways is using power from RGPPL to fire its 47 traction stations across Maharashtra. Before RGPPL came in, these stations received power from the Maharashtra’s government-owned Maharashtra State Electricity Distribution Co. and Tata Power Co


National committee agitated over electricity amendment bill Dt:26-11-2015

National committee agitated over electricity amendment bill

RUPNAGAR: National coordination committee of electricity employees and engineers (NCCOEEE) has sought an immediate meeting with the minister of state Piyush Goyal for a discussion on points of grievances.
Goyal has independenet charge of power, coal, new and renewable energy in the government of India. All India power engineers federation spokesman VK Gupta said NCCOEEE convener AB Bardhan had written a letter to Piyush Goyal which reminded him of the latters agreement to major points of grievances at a discussion held on November 6 at Kochi.
Bardhan said the minister had said major changes would be incorporated in the electricity amendment bill before the onset of the winter session of Parliament and the matter would be discussed at length in New Delhi. With the onset of the parliament session this week, neither the revised bill was published nor the meeting with power sector employees had been fixed.
The letter cautioned that in case no solution to the grievances of the power sector employees was found the path of agitation culminating in the December 8 strike will continue. Gupta further said NCCOEEE would hold its next emergency meeting on December 1 at New Delhi to finalise strategy.
Meanwhile, Punjab state power corporation limited (PSPCL) employees condemned the electricity amendment bill 2014 and decided to boycott work on December 8. The employees have called upon the Punjab Government to clear its stand onthe amendments in the bill especially regarding introduction of supply licenses.


NCCOEEE seeks meeting with Piyush Goyal Dt:25-11-2015

PSPCL employees and engineers condemned the Electricity (Amendment) Bill 2014 and decided to boycott work on December 8
DP Correspondent Patiala

The National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) has sought an immediate meeting with Union Power Minister Piyush Goyal, for discussion on points of grievances.
V K Gupta, a spokesperson of the All-India Power Engineers Federation (AIPEF), said that AB Bardhan, convener of NCCOEEE, has written a letter to Piyush Goyal reminding him that he agreed to major points of grievances at a discussion held on November 6 at Kochi.
It was informed by the minister that major changes in the Electricity (Amendment) Bill be incorporated in the proposed Bill before the onset of the winter session of Parliament and the matter will be discussed at length in New Delhi. As Parliament session begins this week and neither the revised bill has not been published or meeting with power sector employees and engineers been fixed even after a lapse of two weeks. The letter cautioned that in case no solution to the power sector employees grievances is found the path of agitation culminating in December 8 strike will continue.
The NCCOEEE will hold its next emergency meeting on December 1 at New Delhi to finalize the strategy for success of one-day strike/work boycott and future course of action. Meanwhile, the PSPCL employees and engineers condemned the Electricity (Amendment) Bill 2014 and decided to boycott work on December 8. The employees have called upon the Punjab government to clear its stand on the amendments in the Bill especially regarding introduction of supply licensees.
A joint meeting of PSEB Engineers Association, JE Council Technical Services Union, Employees Federation and seven other employees unions of PSPCL/PSTCL was held at Patiala and decided to work boycott on December 8 on a call given by National Co-ordination Committee of Electricity Employees and Engineers.
Baldev Singh, president of the PSEB Engineers Association, said that the finances of state Discoms would be adversely hit by the proposed move to introduce supply licensees and this would cause the already sick Discoms to go further bankrupt. The move would lead to increase in tariff for domestic and agriculture consumers.
Sukhdev Singh, Patron of the JE Council, said while the Union government has admitted the financial crisis and sickness of state Discoms but with the introduction of private supply licensees the financial position would further deteriorate and go out of control. The participants called upon the Punjab government to oppose the amendments in the Bill as has been case with Tamil Nadu and Kerala, Electricity is a concurrent subject and the state must not be dictated by the Centre.


Maharashtra power discom to be split into five companies Dt:24-11-2015

Ashish Roy, TNN

NAGPUR: The board of MSEB Holding Company has decided to split the state power discom MSEDCL (Maharashtra State Electricity Distribution Company Limited/Mahavitaran) into five companies. The in-principle decision was taken on Monday at a meeting in Mumbai and the detailed structure of the companies will be decided in the next meeting.
A senior MSEDCL official said that the division would be only administrative in the first year. "The tariff of the companies will be the same," he said.
Each of the five companies would be headed by a managing director. A holding company of MSEDCL would be formed and the five MDs will be directors in this company. A senior IAS officer will be appointed as the managing director of the holding company. The energy minister will be the ex officio chairman of the company.
The official further said that a power purchase committee would be constituted, which would distribute MSEDCL's power among the five companies on the basis of consumer mix. "The company having more agricultural consumers and less industrial consumers would be given cheaper power while the company whose consumer mix is the reverse will get costlier power," he added. As per the official, the five companies will be formed on the basis of geographical areas of the state. One company will have its jurisdiction all over Vidarbha, another over Marathwada, the third will cater to North Maharashtra, one will cater to Western Maharashtra and fifth to Mumbai and Konkan.
This model will exist for one year after which MSEB Holding Company will complete the unbundling of MSEDCL. "In the second stage, the five companies file separate power tariff petitions and will have different tariffs. This will however, depend on results of partial unbundling," the official said.
Unbundling of MSEDCL is the brainchild of energy minister Chandrashekhar Bawankule. He had constituted a committee comprising MSEB Holding Company director Vishwas Pathak and the then MSEDCL managing director OP Gupta to study the performance of multiple power distribution companies in Rajasthan, Gujarat and Karnataka.
This committee, in its report, stated that while there were many advantages of unbundling MSEDCL, it would entail substantial expenditure. It, therefore, suggested creation of administrative centres under the overall unified structures of a single corporate office. This would lead to better and closer monitoring the distribution losses and recovery of energy charges can be improved. This would create independent profit centres at the regional level which may improve financials of the company.


A new dawn for the power sector? Dt:23-11-2015

SURYA P SETHI

Having correctly predicted the failure of two earlier attempts to turnaround power distribution utilities, I can humbly say that those who do not learn from the mistakes of their predecessors are doomed to repeat them. UDAY, easily the best designed scheme thus far, falls well short of addressing the real malaise. Blaming power distribution companies alone or raising tariffs to eliminate their revenue gaps will simply compound the problem as demonstrated by experience since the first restructuring of 2002-03.

The unaddressed malaise

The average price of bulk power in India is among the highest in the world and India’s average consumer tariff is easily the highest worldwide when corrected for capacity to pay. This is so because: (i) average delivered cost of Indian coal, the cheapest power generation fuel in India, at the burner tip is currently the highest in the world in energy terms; (ii) capital outlays on conventional power and transmission systems are about 35 per cent higher than comparable infrastructure elsewhere; and (iii) everyone engaged in the electricity value-chain, other than the distribution utilities, extracts unjustified amounts of profit despite remaining grossly inefficient by global standards. UDAY is the first financial restructuring scheme that implicitly recognises this malaise and includes measures to reduce bulk power prices through reductions in the delivered cost of coal and potentially higher capacity factors in generation. However, several regulatory and governance shortcomings behind uncompetitive bulk power prices in India remain unaddressed. Bulk power in India should be at least 30 per cent cheaper. Such a correction can, by itself, wipe out all current distribution losses. High bulk power prices severely constrain the scope for creating surpluses in power distribution. The distribution segment also lacks concentrated creamy mega projects. The consequent neglect and disproportionately low investment in distribution has and continues to plague the Indian power sector.

Poor performance standards

Individual distribution investments are relatively small and widely dispersed. Ensuring effectiveness of such outlays requires sophisticated control systems. Instead, prevailing practices seek to maximise rents from what little flows to this segment. Poor metering, billing and collection efficiencies that increase commercial losses essentially expand the limited rent-seeking opportunities in distribution. Poor performance standards that typify India’s power sector are hence exposed most in the loss-making distribution segment.
Much like the earlier two attempts, UDAY also sees higher distribution investments and meaningful monitoring as key ingredients of success. Hence, as before, UDAY incentivises performance improvements through higher allocations from the renamed central schemes supporting rural electrification and distribution reform. Unfortunately, the funding requirements for distribution investments greatly exceed what is actually made available through the central and State resource pools.
Like its predecessors, UDAY too relies on assumed performance improvements delivering additional resource flows to distribution companies for funding unmet investment needs. This does not work because distribution performance improvements are predicated upon: (i) providing funds upfront for such investments; and (ii) radically realigning the risk-reward profile of actors engaged across the electricity value-chain to ensure competitiveness of each element that ultimately feeds distribution. The alternative of raising average consumer tariffs is neither desirable nor viable
UDAY promises additional coal at “notified” prices and “low-cost” bulk power resulting from higher capacity factors in generation to compliant distribution companies. This needs rigorous scrutiny as it presumes higher coal availability for power sector at current notified prices despite shortages across several coal consuming sectors. Stranded coal or power surpluses, if any, likely reflect infrastructure constraints and/or subdued demand at prevailing high tariffs. UDAY lacks an investment component for removing infrastructure constraints and a robust 24x7 power system would typically have capacity factors of around 65 per cent and possibly lower with growing share of renewables.
Contrary to the government’s claim, UDAY is a bailout for the financial institutions that have knowingly funded losses of distribution utilities for years. Converting 75 per cent of their outstanding to State government bonds/loans and the balance potentially to State government guaranteed utility bonds/loans with no provisioning requirements is a recipe for continuing profligate lending practices.

Financial bailout

While the two largest lenders to the sector are outside Reserve Bank of India’s regulatory oversight, it would be educative to understand from the independent bank regulator why the proposed book-keeping exercise negates the need for provisioning 25-100 per cent of the commercial bank exposure to these State government owned distribution companies? Does a State government taking over or guaranteeing its de-facto existing obligations as sole owner of a State corporation change the credit risk?
It is also incorrect to say that consumers will not be burdened by the inefficiencies of the sector. State governments do not have a slush fund to pay for such past or future inefficiencies. They manage their budgets through taxes and levies or cuts in proposed spending or services they provide. Either way, consumers will suffer the full consequence beyond the haircut taken by the lenders through reduced interest.
UDAY proposes to restructure an outstanding of ?4.3 trillion. This off-balance-sheet fiscal hole is a sizeable 15.8 per cent of the estimated combined total liabilities of all States as of end March 2015. These combined total liabilities grew by less than ?3 trillion in 2014-15. UDAY alone will add ?3.2 trillion to State government liabilities through new bonds or state development loans (SDLs) and potentially create a contingent liability for the balance ?1.1 trillion.
The additional interest burden on State governments from UDAY will further pressure State deficits and likely breach the limit on interest payments remaining below 10 per cent of revenue receipts. And finally, there is no market for non-SLR bonds/SDLs. The lenders will simply be asked to accept these bonds in lieu of their outstanding.
The above facts pose daunting questions for State finances. The consequences will be dire for the six most-indebted States. Excluding such fiscal profligacy from State deficits for two years does not change the reality of seriously breached fiscal discipline. For reasons detailed above, two additional years with UDAY would likely make the financial/fiscal challenge even bigger, in keeping with the experience of the previous 13 years.
Rhetoric, repeated constantly, will not deliver a bankable and competitive 24x7 power system for all by 2019. Despite good intentions and a feverish pace, the power ministry’s capacity limitations are showing. Those responsible for the current mess appear to still hold sway. We can again kick the can down the road, or bite the bullet and change course to deliver a radically reformed power sector fully compliant with Electricity Act 2003.


Costly pampering of Discoms --Letter Dt:21-11-2015

Costly pampering

Apropos the editorial “Costly pampering of discoms” (Daily Post, November 4). It has been rightly pointed out that the Central government’s bailout scheme UDAY for discoms falls short of addressing the problem.
The National Democratic Alliance (NDA) government has prepared a financial bailout plan to make up for the losses suffered by state power distribution companies or discoms. The government claims that this plan is not a populist measure like the earlier bailout packages.
Power generation companies reach most final consumers through bankrupt state electricity boards. Even the state run thermal units have been on forced shut down due to power purchase agreements with private sector. The generating company has to bear the brunt of fixed charges which is in range of rupee one per unit. The last bailout package given three years ago had, in fact, prepared a similar financial restructuring plan for the discoms and linked it to various performance-related parameters. Some of the states opted for that plan, but in the absence of a mechanism to monitor their performances, it failed.
The solution is technically obvious, but politically challenging. The ruling party in a state might agree to the terms and conditions of the plan now, but this might be difficult to implement in the absence of political will. For a politician, votes are more important than reforms and state governments may still shy away from rewriting the contract on power supply and tariffs. Every politician and bureaucrat has a different solution to the problems being faced by the power sector.
Lincoln gupta, Chandigarh


Dabhol project to resume generation today Dt:21-11-2015

Initially 300 Mw to be supplied to the Indian Railways

Ratnagiri Gas & Power Pvt Ltd (RGPPL), better known in its earlier and controversial name of Dabhol Power Company, is to restart generation from Saturday.
It had earlier missed the deadlines of November 1, 9 and 18 for doing so, due to procedural and other issues. RGPPL’s board of directors on September 30 had approved de-merger of the company, into one entity for power generation and the other for running a liquefied natural gas terminal.
The project has been closed since December 28, 2013, for want of gas. An official at the plant site, who did not want to be identified, told this newspaper: “Against the total generation capacity of 1,967 Mw, (we) will initially produce 300 Mw to supply power to Indian Railways (IR). Another 200 Mw will be generated in due course. RGPPL and IR have entered into a power purchase agreement (PPA) for the proposed drawal of 500 Mw.”
The official said they'd got the needed approval from the Central Electricity Regulatory Commission on the PPA and for restart of generation on gas procured through reverse bidding. The cost of power will be Rs 4.79 a unit.
According to the official, the Maharashtra government has decided to waive transmission charges on the evacuation of power. The state government had terminated its PPA with RGPPL in early January and it has no plans for its revival.


7th Pay panel report at a glance Dt:20-11-2015

GENERAL RECOMMENDATIONS

  • Recommended date of implementation is January 1, 2016
  • Minimum monthly pay set at Rs 18,000
  • Maximum monthly pay Rs 2.25 lakh (apex scale), Rs 2.50 lakh (Cabinet secretary and equivalent)
  • Pay bands, grade pay abolished, new pay matrix designed
  • Rate of annual increment retained at 3%
  • Performance-related pay recommended for all categories

OVERALL INCREASE IN PAY,ALLOWANCES,PENSIONS: 23.55 %

  • Increase in pay: 16%; Increase in allowances: 63%, Increase in pension: 24%

ALLOWANCES

  • Recommends abolishing 52 allowances altogether
  • Another 36 allowances abolished as separate identities, but subsumed in existing allowances
  • Allowances relating to risk and hardship to be governed by the proposed Risk and Hardship Matrix
  • HRA recommended to be paid at the rate of 24%, 16%, 8% of new basic pay for class X, Y and Z cities, respectively
  • HRA to be revised to 27%, 18%, 9% respectively, when DA crosses 50%, and further revised to 30%, 20%, 10% when DA crosses 100%
  • Emphasis placed on simplifying the process of claiming allowances

INSURANCE SCHEMES AND MEDICAL FACILITIES

  • Substantial increase for central government employees group insurance schemes' monthly deduction and insurance amount
  • Introduction of a Health Insurance Scheme for employees and pensioners recommended

PENSION, COMPENSATION AND GRATUITY

  • Revised OROP-type pension formulation for civil, defence and paramilitary employees
  • Enhancement in the ceiling of gratuity from Rs 10 lakh to Rs 20 lakh
  • Recommends reverting to a slab-based system for disability element
  • Revision of rates of lump sum compensation for next of kin to be applied uniformly to defence, civil, paramilitary personnel
  • Paramilitary personnel to be accorded martyr status in case of death in line of duty
  • Strong pension grievance redressal mechanism recommended



Government receives 101 applications for post of chairman and managing director at NTPC Dt:18-11-2015

The government has received 101 applications for the post of chairman and managing director at NTPC, the country’s largest power generation company. The last time the post fell vacant, there were 10 applications and prior to that there were about a dozen.
“In an effort to attract candidates from the private sector, the government has relaxed a few requirements, including the necessity of an engineering degree, which might have resulted in such a large number of candidates applying for the post,” a senior official said on condition of anonymity.
The search committee will shortlist 10 candidates and call them for interviews. NTPCBSE 0.72 % is at a key juncture in its history, said the official. "The post has been lying vacant for more than two months at a time when the company has embarked on amega expansion plan and the government has promised affordable and quality power for all by 2020," the person said. There is speculation about some of the front runners. From the private sector, they include Praveer Sinha, managing director of Tata Power at New Delhi
Others said to be in contention are ICP Keshari, a 1988 batch Indian Administrative Service (IAS) officer from the Madhya Pradesh cadre, and Aman Kumar Singh, principal secretary in the IT and electronics department in Chhattisgarh. Keshari is currently a special commissioner of joint secretary rank in Madhya Pradesh. They couldn't immediately be reached for comment.
According to sources, almost all NTPC board members except the finance director have also applied for the post.


Tariff Policy to Make Discoms Efficient, Boost Investment: Goyal Dt:18-11-2015

New Delhi: The new tariff policy will boost the regulatory mechanism and bring efficiency in the functioning of discoms, even as the proposed framework will help attract investments in the power sector, Union Minister Piyush Goyal said on Wednesday.
"The policy will reflect a concern to environment and encourage renewable energy. It will encourage faster roll out of investment in the sector," Goyal told reporters here.
Power Ministry is in the process of getting approval from Union Cabinet for its new electricity tariff policy. The central government had approved the Tariff Policy under the provisions of Electricity Act, 2003, in 2006.
Goyal said that the new policy will strengthen the regulatory mechanism so that discoms become more efficient and conscious towards their duties to consumers.
"It will also help India's energy security by planning in advance for the requirements for tomorrow. Several unique aspects which have not been touched in the past are being brought out in this policy," he added.
Earlier, Goyal had indicated that the new tariff policy will give a big push to electricity generated from renewable energy sources and address concerns related to environment.
Goyal had said, "We will come out with a new tariff policy very soon. It will allow distribution companies to buy any amount of power produced from the waste. The power plants will have to use processed municipal waste water available in their vicinity (in 100 km radius)."
The proposed tariff policy is aimed to provide incentives to renewable energy projects as well as efficient use of resources by power generation plants based on conventional sources of energy like coal-based thermal projects.


Caution on solar power Dt:16-11-2015

Low tariffs conceal major evacuation challengesBusiness Standard Editorial Comment | New Delhi November 16, 2015

The price of solar power has steadily declined ever since the launch of the Jawaharlal Nehru National Solar Power Mission five years ago. From nearly Rs 18 a unit in 2010, rates have plummeted to below Rs 5 in the latest bids. The drop is sharp in the past few months. This is attributable partly to aggressive bidding by solar power producers and partly to improved technology and a decline in equipment prices because of intense competition in this field and subsidies elsewhere. However, for a sector which is yet to blossom, a steep fall in output prices is not an unmitigated blessing. On the upside, low tariffs impart the much-needed grid parity to renewable energy - suggesting solar power may sooner than expected offer serious competition to conventional power produced from gas or even coal. But, on the downside, they make investors nervous about the returns on their investment. They also fear that big players in the power sector, such as the National Thermal Power Corporation (NTPC), which have the capacity to bundle solar power with conventional energy, may bring average rates down to below even Rs 3.5 per unit, which they may find difficult to match. There is, thus, a danger that prospective investors may turn wary. This would endanger the ambitious target of 100,000 MW of solar power, including 60,000 MW of grid-connected power.
The solar sector also needs to overcome some other formidable challenges to get into a fast-growth trajectory. For one, the evacuation of power from solar plants to feed it into the grid, an essential prerequisite for ensuring their viability, would need greater attention and investment. Once the cost incurred on the evacuation infrastructure is built into the tariff, the economics of solar power production may change. The lifting of solar power by the distribution companies is also a question mark because of their poor financial health, and because renewable energy purchase obligations may not be effectively enforced.
Many investors are asking deeper questions about viability. Nearly one square kilometre of land is needed to put up a 40-60 MW solar plant. Such large chunks of land are not readily available except in isolated areas from which evacuation of power becomes even more difficult. As it is, the track record of capacity addition in this sector in recent years is far from satisfactory. The bulk of the liberal investment commitments - amounting to over $200 billion (approximately Rs 13 lakh crore at the current exchange rate) - made during the global renewable energy conference convened by the government early this year, are yet to fructify. The Centre and state governments cannot be lulled into complacency by low tariffs. Sustaining investor confidence could be an even harder task.


Power sector employees of Haryana to strike work against electricity bill Dt:16-11-2015

Power sector employees and engineers from across the country will strike work on December 8 at New Delhi against the Electricity(amendment) bill 2014.

Power sector employees of Haryana to strike work against electricity bill

This was stated by Shailender Dubey Chairman, All India Power Engineers Federation (AIPEF) who was addressing the state level convention of All Haryana Power Corporation workers union at Rohtak on Sunday. The convention was presided over by Devinder Singh Hooda President of workers union.
Dubey alleged that the Government is trying its best to get passed the Electricity (Amendment ) bill in the present form despite the opposition of 18 states. In case the bill is passed in the winter session the power will be out of reach of poor and super rich industrialists will rule the power sector threatening the economic sovereignty of the country.
Subhash Lamba Secretary of Electricity Employees Federation of India said that after the implementation of Electricity bill 2003 the financial losses of power distribution companies has increased from 26000 crore to 3.5 lakh crore due to outsourcing and privatisation policies adopted by various state governments. He said that the country is generating 1.76 lakh megawatts despite against available capacity of 2.76 lakh megawatts.
Lamba further said, once the amendment bill is passed there will be competition amongst private companies to increase their profits leading to higher power rates. Further when electricity bill 2003 was passed it was assured that all the consumers of the country will get power connection by 2010 but even today there are 30 crore consumers without a power connection.
The other main speakers of various organizations who addressed the convention were AITUC General Secretary Bechugiri, R D Yadav Secretary Hind Mazdoor Sabha, Anup Singh General Secretary INTUC and Sher Singh President Kisan Sabha. All The speakers dealt in different menacing features of electricity (amendment ) bill and demanded withdrawal of bill in present form to protect the interest of consumers. Further this bill will pave the way to weaken the state sector power utilities.

Indian Railways may have missed chance to cut power bill Dt:14-11-2015

Indian Railways may have missed chance to cut power bill

The Indian Railways may have lost an opportunity to reduce its electricity bill by Rs 430 crore, as it was asked to enter into a bilateral power purchase agreement with Ratnagiri Gas and Power (RGPPL). The railways had earlier floated bids for procuring 500 MW of power it needed additionally.
The transporter’s electricity bill stood at Rs 12,000 crore last fiscal. While the railways stands to save nearly Rs 4 per unit with the deal with RGPPL, as the current average cost of power procured from the Maharashtra discom is Rs 8.50 per unit, it could have saved a further R1 per unit if it had taken the competitive bidding route for procuring power. The tariff offered by RGPPL is Rs 4.70 per unit, but in one of the bids for 50 MW, the national transporter found Adani Power to be the lowest bidder at Rs 3.7 per unit. The average cost of power for the railways nationally is around Rs 6.75 per unit.
If Adani Power’s bid is taken as the benchmark for competitive bids, the railways would have saved R1 per unit compared with RGPPL’s rate, amounting to Rs 438 crore. “The decision for procuring power from RGPPL was made before the results of a 50-MW tender were announced. We had not anticipated that we would get power at such a low rate for our 50-MW tender.” a railway official, requesting anonymity, told FE.


NCCOEEE MEETING POSTPONED Dt:12-11-2015

ALL OFFICE BEARERS - AIPEF
CHAIRMAN/SECRETARY GENERAL - SIPEF/WIPEF/EIPEF/NIPEF
PRESIDENT/GENERAL SECRETARY - ALL AIPEF CONSTITUENTS

NCCOEEE MEETING POSTPONED

Pl go through the NCCOEEE circular attached. NCCOEEE meeting scheduled for 16th Nov has been postponed because of problem of festive rush due to which many delegates are not able to participate . Meanwhile continue campaign fo 08 Dec Strike/Work Boycott at state level .
more ...

CERC has issued order on 5th November 2015 which recognize Railways as a deemed licensee and has order Dt:09-11-2015

a. In the light of the judgement of the Supreme Court in UOI Vs UPSEB supra, it is held that Railways are an authorized entity under the Railways Act to undertake transmission and distribution activities in connection with the working of the railways, independent of its status under the Electricity Act.
b. The information sought by MSETCL vide its letter dated 6.7.2015 are not relevant for grant of connectivity and concurrence to Railways for scheduling of power from RGPPL and GUVNL through the ISTS and State networks by availing long term access or medium term open access in terms of Connectivity Regulations.
c. Railway is a deemed licensee under third proviso to Section 14 of the Electricity Act and no separate declaration to that effect is required from the Appropriate Commission. Railway as a deemed licensee shall be bound by the terms and conditions of licence specified or to be specified by the Appropriate Commission under proviso to Section 16 of the Electricity Act.
d. The drawl points from ISTS located within a State shall be treated as a single entity for the purpose of scheduling. The group of Traction Subsections situated in a State and connected directly with ISTS may be treated as one “fragmented control area” and the responsibility for scheduling, metering, balancing, applicability of ISTS charges and losses etc, shall vest in the concerned RLDC. For the Traction Subsections situated in a State and connected to State network, these functions shall vest in the concerned SLDC.
e. All concerned RLDCs, State Transmission Utilities and SLDCs are directed to facilitate long term access and medium term access in terms of Connectivity Regulations from the generating stations or other sources to the facilities and network of Indian Railways.

Editorial: Piyush Goyal’s work begins now Dt:09-11-2015

The fear is he’s given states a really long rope
Vinod Kumar Gupta

Power minister Piyush Goyal really crunched the numbers to study the causes—and identify solutions—of the power sector’s problems before the Cabinet cleared his plan for turning around ailing electricity distribution companies (discoms). Some were obvious, some not, but all require tremendous monitoring to ensure the plan doesn’t go the way of the other two such bailouts over the last decade or so. With interest costs comprising 10-20% of the costs of power in states like Rajasthan and Tamil Nadu, getting hapless banks to take a huge haircut has been the focus of all discom turnaround plans—at the national level, interest costs add up to over 80% of the Rs 64,000 crore FY14 loss. With transport costs comprising over 40% of coal costs, a big part of Goyal’s plan is to completely rework coal linkages to reduce the mine-to-power-plant distance. Allowing producers like NTPC to move coal to thermally efficient plants can cut costs by 30-35 paise per unit of electricity, forcing Coal India to supply the grades they are charging for—incorrect billing is a chronic problem—can cut costs another 15-20 paise; all told, Goyal hopes to cut coal costs by around 20% over 2-3 years. Cutting aggregate technical and commercial (ATC) losses is critical—lowering losses from 50% to 25% will reduce tariffs by a third—so that is the one number Goyal has hard-wired into his plan.
Previous plans, including the UPA’s R40,000 crore bailout in 2002, put state governments under no real pressure to deliver—except, dues to PSUs like NTPC had to be made, or would be cut from the funds given by the Centre to the states. Goyal has got states to shoulder more of the burden—half of discom debt will be taken over this year itself and, by FY21, half the discom loss will be transferred to the states. This is too long a rope. While states will benefit immediately from the interest cut—they will pay 8% on bonds versus 14% by the discoms today—their interest costs will not be counted in the FRBM obligations till FY18; this means they can run profligate power operations without having to sacrifice other expenditure. Giving states till FY21 to absorb just half the discom loss reduces the urgency to ensure ATC losses are cut and tariffs raised regularly; ATC, in any case, is a nebulous concept—that for UP fell miraculously to under 25% in FY14 from 43% in FY13, and rose equally dramatically to 40% in Q1FY16. Sadly there is little to encourage competition—making open access mandatory in 3 years would have done wonders to raise efficiency—without which sharp ATC cuts are also difficult. While Goyal will have his hands more than full just implementing the plan, as our page 1 graphic makes clear, the plan will fail without regular and large tariff hikes.

Beyond UDAY Dt:08-11-2015

Last week, the government unveiled its Ujwal DISCOM Assurance Yojana (UDAY), with the intent to find a permanent solution to the financial mess that the power distribution is in. Massive accumulated losses have made these state-owned entities not only hugely dependent on banks but also unable to service their huge debts. It is a travesty that India has over 270 gigawatts of power generation capacity, but is currently using only half of it, because distributors refuse to lift power that they are forced to sell at a loss. As a consequence, several parts of the country are still suffer long periods of outages. The solution to the problem is technically obvious, but politically challenging. The first phase of the solution is to buffer the finances of the distribution companies, or discoms, from the subsidies that state governments may want to provide for power. UDAY attempts this by asking states to issue bonds to banks as repayment for discom dues. This will accomplish the significant objective of forcing states to put their money where their mouth is on power subsidies. They will now have to directly bear on their budgets the entire cost of the subsidies. From the discoms' perspective, the shifting of the debt burden to the state government changes their financial picture significantly and, presumably, allow them to buy enough power to meet aggregate demand in their domains. This is all to the good.
But, the next step, that is implied by the policy but not explicitly articulated, is where the challenge lies. Two previous attempts to break the financial logjam in this sector, both of which essentially involved sequestering funds from central transfers to pay off the discoms' dues to various suppliers both ended up unsuccessful precisely because the next step was not taken. Fundamentally, unless discoms are allowed to charge prices that reflect cost of delivery, including a return on capital, they will always be on the financial brink. This could be done in two ways; let the consumer pay the full price, as determined by state regulators, after which the state governments can directly transfer subsidy payments to selected groups. This way, discoms' financial health is protected and the subsidy becomes an explicit contract between the government and the beneficiary. A more practical but also more risky approach is to build the subsidy into the tariffs, but have an annual budgetary provision for subsidies, which is transferred to discoms at periodic intervals. This is risky because it is difficult to enforce. In essence though, whatever approach is taken, UDAY will meet the same fate as its predecessors unless it is followed up by meaningful tariff reform.
The political hesitancy in implementing this is somewhat surprising. Over and over again, consumers have demonstrated their willingness to pay higher prices for services as long as supply and quality are consistent and assured. From education to healthcare to water to energy, quality improvements are essential to meeting mass aspirations. But state governments still shy away from re-writing the contract on power supply and tariffs with their constituents. If the same reluctance persists after UDAY, it will bring the commendable efforts of the central government to solve this problem to nought.

Minister assures Powercom engineers on their grievances Dt:08-11-2015

JALANDHAR: Piyush Goyal Union Power Minister assured the delegation of National Co-ordination Committee for Electricity Employees and Engineers NCCOEEE) that detailed discussion with them will be held in New Delhi before presenting the Electricity (Amendment ) bill 2014 in the Parliament.
A delegation of NCCOEEE led by K O Habib met the Piyush Goyal at the venue of power ministers conference. The delegates briefed the minister about their apprehensions on the proposed amendments to the electricity bill and its implications .
In the one hour meeting the Piyush Goyal Union Power Minister assured the delegation that the concerns of the employees and engineers working in the power sector will be addressed. He informed that the states have been given the power to decide the timing and method of introducing competition in distribution and no cherry picking will t be permitted. The necessary changes in the bill cleared by the standing committee will be made after further discussion in the next meeting to be held after three weeks.
Earlier more than 10,000 employees took out a massive protest march under the banner of NCCOEEE a broad-based platform of all the major federations of employees and engineers in the country’s power sector, to the venue of the All India conference of state power ministers on Friday demanding revocation of the proposed amendment to the Electricity Act 2003.
Manik Dey Power Minister of Tripura addressed the demonstration & extended support to power workers against Electricity(Amendment) Bill 2014 in their struggle . He urged that profits made by public sector undertakings in the power sector, having infrastructure built using public money, need to be passed on to consumers through State-owned distribution companies.
P Rathnakar Rao Secretary General All India Power Engineers Federation (AIPEF ) Mohd. Shereef President KSEB Engineers Association along with other leaders addressed the demonstration.
The protest was organized against the Central Government’s move to pass the Electricity Amendment Bill – 2014.The Bill primarily seeks to segregate the distribution network from the electricity supply business, and to introduce multiple supply licenses in the market.
A number of speakers while addressing the mammoth gathering alleged that the government did not consult the trade unions in the sector while formulating the amendments. Even the parliamentary standing committee on power sector reforms did not take into consideration the view point of the unions. Besides, 18 states, including Kerala and Gujarat had expressed strong reservations on the amendments

Electricity Amendmment Bill: Power sector employees submits memorandum to Piyush Goyal Dt:08-11-2015

Power sector engineers and employees under the banner of National Co-ordination Committee of Electricity Employees and Engineers (NCCOEEE) submitted a memorandum to Union Power Minister, Piyush Goyal.
The representatives of NCCOEEE had an hour long meeting with Piyush Goyal at the venue of Power Ministers conference. They presented their viewpoint on the various issues concerning the power sector and implications of the proposed amendments in electricity bill.
The minister assured the delegation that the concerns of the employees and engineers working in the power sector will be addressed. He informed that the states have been given the power to decide the timing and method of introducing competition in distribution and no cherry picking will be permitted. The necessary changes in the bill cleared by the standing committee will be made
Earlier more than 10,000 employees took out a massive protest march to the venue of the All India Conference of state power ministers on Friday demanding revocation of the proposed amendment to the Electricity Act 2003.
P Rathnakar Rao, Secretary General, All India Power Engineers Federation (AIPEF), Mohd Shereef, President, KSEB Engineers Association along with other leaders addressed the demonstration.
Power Minister of Tripura addressed the demonstration and extended support to power workers against Electricity (Amendment) Bill 2014 in their struggle.
"Profits made by public sector undertakings in the power sector, having infrastructure built using public money, need to be passed on to consumers through State-owned distribution companies," urged Manik Dey, Electricity Minister of Tripura.
The reforms in the power sector since liberalisation have put a heavy burden on the distribution companies. In the past 12 years, the losses accrued by power distribution companies have crossed Rs. 2,60,000 crores and their debt has gone above Rs. 3.5 lakh crores. The proposed amendments will further worsen the situation.
The NCCOEEE also alleged that the government did not consult the trade unions in the sector while formulating the amendments. Even the parliamentary standing committee on power sector reforms did not take into consideration the view point of the unions. Besides, 18 states, including Kerala and Gujarat had expressed strong reservations on the amendments.

Piyush Goyal assures power sector employees further talks on electricity bill Dt:07-11-2015

Kochi
Piyush Goyal Union Power Minister assured the delegation of National Co-ordination Committee for Electricity Employees and Engineers ( NCCOEEE) that detailed discussion with them will be held in New Delhi before presenting the Electricity (Amendment ) bill 2014 in the Parliament. A delegation of NCCOEEE led by K O Habib met the Piyush Goyal at the venue of power ministers conference. The delegates briefed the minister about their apprehensions on the proposed amendments to the electricity bill and its implications .
In the one hour meeting the Piyush Goyal Union Power Minister assured the delegation that the concerns of the employees and engineers working in the power sector will be addressed. He informed that the states have been given the power to decide the timing and method of introducing competition in distribution and no cherry picking will t be permitted. The necessary changes in the bill cleared by the standing committee will be made after further discussion in the next meeting to be held after three weeks.
Earlier more than 10,000 employees took out a massive protest march under the banner of NCCOEEE a broad-based platform of all the major federations of employees and engineers in the country’s power sector, to the venue of the All India conference of state power ministers on Friday demanding revocation of the proposed amendment to the Electricity Act 2003.
Manik Dey Power Minister of Tripura addressed the demonstration & extended support to power workers against Electricity(Amendment) Bill 2014 in their struggle . He urged that profits made by public sector undertakings in the power sector, having infrastructure built using public money, need to be passed on to consumers through State-owned distribution companies.
P Rathnakar Rao Secretary General All India Power Engineers Federation (AIPEF ) Mohd. Shereef President KSEB Engineers Association along with other leaders addressed the demonstration.
The protest was organized against the Central Government’s move to pass the Electricity Amendment Bill – 2014.The Bill primarily seeks to segregate the distribution network from the electricity supply business, and to introduce multiple supply licenses in the market. A number of speakers while addressing the mammoth gathering alleged that the government did not consult the trade unions in the sector while formulating the amendments. Even the parliamentary standing committee on power sector reforms did not take into consideration the view point of the unions. Besides, 18 states, including Kerala and Gujarat had expressed strong reservations on the amendments.

Bill for power distribution reforms likely in Winter Session Dt:06-11-2015

Kochi
A bill seeking reforms in the power distribution sector is likely to come up in the Winter Session of Parliament, Union Power Minister Piyush Goyal said on Friday. The Minister said this after meeting leaders of trade nunions who had come here to protest against provisions in Electricity (Amendment) Bill cleared by the Standing Committee of Parliament and assured them that the concerns of the employees in the power sector will be addressed.
"I have assured them that there will be no retrenchment and cherry picking will not be permitted. The states have been given the power to decide the timing and method of introducing competition in distribution," he told reporters here when asked about trade union protest at the venue of the conference of Power, Renewable Energy and Mines Ministers of states and Union Territories at this coastal city. He said the states have been given the power to decide the roadmap about how and when they would like to introduce competition in the sector.
ll #power distribution reforms #winter session of parliament
"While we believe competition is essential to improve the efficiency and customer service for the people of India, it is also important for us to respect the state's sentiment," Goyal said. Asked whether the Electricity (Amendment) Bill would be taken up in the upcoming Winter Session of Parliament, he said, "I do hope that".
He, however, expressed concern over the approach being adopted by the opposition in Parliament, alleging that it was "hellbent on stopping the economic progress of the country and does not desire that the people of India should benefit by progressive measures of the Modi government".
"The government is completely determined to run the Winter Session. We are very very keen to serve the people of India for which we want the Parliament to run," he said.
The Centre has approved various amendments to the existing Electricity Act 2003, aimed at enabling consumers to choose their electricity supplier, among other reforms. The amendments will also promote competition, efficiency in operations and improvement in quality of supply of electricity in the country, resulting in capacity addition and ultimate benefit to consumers.
The Centre has also said wherever there are existing power purchase agreements, the interests of stakeholders will be protected, which will be done in consultation with the power regulator. The government plans to allow competition at the last mile or to the end-consumer without raising tariff or compromising on better customer service.

Power employees oppose ministers’ conclave in Kochi Dt:05-11-2015

Kuldeep Chauhan

The National Coordination Committee of Electricity Employees and Engineers (NCCOEEE) has opposed the proposed conference of state power ministers called by the Union Ministry of Power on November 6 and 7 in Kochi that aims at getting a stamp of approval for the proposed Electricity (amendment) Bill, 2014. The committee opposes this Bill on the ground that “the Centre seeks to handover distribution power business to private players”. The NCCOEEE, a federation of power sector employees and engineers of all state-run electricity boards, including HP State Electricity Board Limited (HPSEBL), has shot off a letter to Prime Minister Narendra Modi stating that “if the conference moves ahead placing it in the winter session of Parliament, they will oppose it by tooth and nail”. The Centre is pushing the Bill paving way for private players as they have made no investment in the name of “improving power supplies to industry, engineers told The Tribune. “The Prime Minister has been apprised of the situation and hopefully, the government will drop this Bill”, adds Sunil Grover, a NCCOEEE member. The committee opposes power ministers’ conference as it is being used as a platform to get their stamp of approval for the Bill, despite the fact that as many as 18 states have opposed it, says HL Verma, general secretary, HPSEBL union. The Centre has been trying to split power distribution companies into carriage (distribution network) and content (electricity supply business) opening door-to-profit making private sharks take control of both carriage and content, protest engineers. But committee pleads that the proposed “carriage and content” business will burden the state-run distribution utilities. The Electricity Act, 2003 has assured cheaper electricity for all by improving efficiency and competition. Meanwhile, a report of the Parliamentary Standing Committee (PSC) cites that the committee consulted captains of industries and power producers on the Bill and they favour proposed amendment in the Act segregating “carriage and content”. “The PSC says that it will ensure grid security and improved power scenario in the country,” comment power officials.

Cabinet approves bailout plan for revival of Discoms Dt:06-11-2015

Cabinet approves bailout plan for revival of Discoms
Vinod Kumar Gupta

New Delhi
The Union Cabinet today approved the financial bailout for revival of Power Distribution companies (Discoms ) mooted by Power Ministry.
The weakest link in the value chain is distribution, wherein Discoms in the country have accumulated losses of approximately Rs. 3.8 lakh crore and outstanding debt of approximately Rs. 4.3 lakh crore as on March, 2015.
Financially stressed Discoms with the potential to seriously impact the banking sector and the economy at large are not able to supply adequate power at affordable rates thus adversely affect national priorities.
Due to legacy issues, Discoms are trapped in a vicious cycle with operational losses being funded by debt. Outstanding debt of DISCOMs has increased from about Rs. 2.4 lakh crore in 2011-12 to about Rs. 4.3 lakh crore in 2014-15, with interest rates upto14-15%.
UDAY the new scheme assures the rise of vibrant and efficient Discoms s through a permanent resolution of past as well as potential future issues of the sector. . This is through four initiatives such as improving operational efficiencies ,reduction of cost of power; reduction in interest cost of companies and enforcing financial discipline on Discoms through alignment with State finances.
Operational efficiency improvements like compulsory smart metering, up -gradation of transformers, meters etc., energy efficiency measures like efficient LED bulbs, agricultural pumps, fans & air-conditioners etc. will reduce the average AT&C loss from around 22% to 15% and eliminate the gap between Average Revenue Realized (ARR) & Average Cost of Supply (ACS) by 2018-19.
States shall take over 75% of Discoms debt as on 30 September 2015 over two years – 50% of DISCOM debt shall be taken over in 2015-16 and 25% in 2016-17. This will reduce the interest cost on the debt taken over by the States to around 8-9%, from as high as 14-15%; thus improving overall efficiency.
Further provisions for spreading the financial burden on States over three years, will give States flexibility in managing the interest payment on the debt taken over, within their available fiscal space in the initial few years. States not meeting operational milestones will be liable to forfeit their claim on other incentives given under other schemes UDAY is optional for all States. However, States are encouraged to take the benefit at the earliest as benefits are dependent on the performance.

Government Approves Rescue Package for Power Sector Dt:06-11-2015

New Delhi: Government approved a rescue package for its loss-making power utilities on Thursday, a major reform that Prime Minister Narendra Modi hopes will end electricity blackouts and spur economic growth.
Power Minister Piyush Goyal said states would be allowed to take over 75 percent of the debts of their utility companies, which now stand at Rs 4.3 lakh crore ($65.3 billion) after years of undercharging customers for electricity.
By clearing past debts and putting them on a better financial footing, Mr Goyal said the utilities would be returned to profitability by 2019.
"The cabinet believes that this will help the Indian power sector turn around once and for all and for the states to provide 24/7 power," he told reporters after the cabinet cleared the rescue plan.
PM Modi has urged the power ministry and states to find a way to overhaul the power distribution sector, whose weak finances have crimped bank lending and undermined the push to provide reliable electricity in Asia's third-largest economy.
Worried about a series of setbacks to his economic reform agenda, PM Modi has in recent months marked out utilities as an area where he can revive his reputation as a leader ready to take tough decisions.
Past government attempts at instigating reform, including a 2012 rescue plan under PM Modi's predecessor, have largely failed because utilities - whose prices are set by local regulators and not by New Delhi - continued to sell power below cost.
States and utilities which want to take up the rescue package will sign agreements with the power ministry committing them to improve performance in return for the debt swap, Mr Goyal said.
The government pledged to cut electricity theft and other transmission losses to 15 per cent from 22 per cent within four years.

Financial bailout of ailing Power Sector Dt:04-11-2015

Financial bailout of Power Sector
Vinod Kumar Gupta

India’s power sector is poised for a dramatic change and but can the government wipe out state distribution companies’ losses by 2019 is a million dolor question. The future of NDA government is directly linked with the reforms in the ailing power sector of the country .
The Government has now proposed another financial bailout package for state owned power distribution companies (Discoms ). Centre proposes to convert 75% of loans to Discoms into government bonds and reduce the interest on the remaining 25 % loan to bailout 8 Discoms. The Power Ministry has come out with a financial restructuring to deal with over Rs 4 lakh crore loans of power distribution companies .70% of the debt is held by utilities in eight states, namely, Rajasthan, Uttar Pradesh, Haryana, Tamil Nadu, Andhra Pradesh, Jharkhand, Bihar and Telangana and government has planned to bailout these utilities.. The state run Discoms are facing cash crunch and are incurring annual losses of about Rs 60,000 crore.
In September 2012 the UPA government had come out with a financial restructuring plan for the Discoms that came with some conditions. The states were asked to take up half of loan through state-guaranteed bonds in a phased manner. The other half portion was converted into long-term loans with a guarantee from the respective states. Some of the states opted for this financial restructuring but there was no mechanism in place to monitor their performances .
Eight states namely U.P., Haryana, Jharkhand, Tamil Nadu, A.P., Kerala, Rajasthan and Bihar signed financial restructuring plan bailout package with government but could not adhere to the terms and conditions and are again in red. Now most of these state Discoms are again ready to take another bailout package. The tariff increase in the eight States Discoms with highest debt has not been expected lines in last few years. The present average difference between average cost of supply and average tariff is around 90 paise per unit so the financial losses of Discoms are going to increase.
Now Government is once again ready with financial bailout package claiming that this time it will work. Under this plan 50% of outstanding debt as on September 2015 will be converted to state government securities by March 2016 , while the remaining 25% will be converted by March 2017 to solve the troubles at cash starved power utilities. At the end of financial year 2017-18, about 10% of such losses will be included in the state’s fiscal deficit, and by March 2022, 100% losses made by Discoms will be tagged to the fiscal deficit, according to the proposal.
The proposal floated by the government also puts a cap on future borrowings of these Discoms, with fresh working capital loans limited to only 33% of a Discoms annual revenue. This will push these companies to raise tariffs and cut losses, to borrow in a more efficient manner.
This conversion will happen through the issue of special purpose bonds outside the Fiscal Responsibility and Budget Management Act, 2003 limit. So, basically, the Discoms debt will be transferred from banks loan books to their investment books as state government bonds. This seems to be a proposal to reduce the non performing assets of banks rather to improve the working of power sector.
The government now claims that this third bailout plan is not a populist measure on the lines of previous bailouts announced by previous governments but is different in nature. Now if the states fail to cut losses and abide by the financial restructuring, they will have to cope with punitive action in the form of curtailed funds from the central pool. The Centre wants the states to transfer most of these losses over a period of five years. Now the Centre is facilitating technical reforms and pursuing states to take up financial issues such as hiking tariff, bringing down debt and losses, and raising funds from market. This seems to be attempt to put “old wine in new bottle “.
The electricity reforms introduced by the Electricity Act 2003, whose primary goal was to privatize the power sector. The privatization process began with Orissa and Delhi and in both cases only private companies gained at the expense of Government . The CAG Draft Report on Delhi’s Discoms describing the Rs. 8,000 crore loot of consumers. In Orissa the Orissa Electricity Regulatory Commission cancelled the licenses of the three Reliance distribution companies for failing to deliver on any count. This is the face of so called reforms in the power sector. The reason for choosing Orissa and Delhi for distribution reforms were that both had low agricultural loads. Delhi has very little agriculture, and Orissa had done poorly in extending electricity to rural areas.
The present NDA Government announced that it will be able to supply affordable power supply to all the people of country and people will liberty to choose their service providers as in case of mobile companies. This electoral promise of affordable power for all by 2019 will be eagerly awaited as previous governments had failed to deliver what they promised.
The failure of previous governments in pushing the desired reforms lied in the lack of political will to check the menace of power theft , end the free / subsidised supply to agriculture sector and a free hand to electricity regulators to decide power tariffs. This is a reality in most jurisdictions of the loss-making distribution companies irrespective of ruling political party of the state.
Tariff is a state subject and the subsidies need to be paid in advance every quarter. But due to states own financial problems the subsidies are delayed and these delays only add to the inefficiencies of Discoms. Every state governments asks the Discoms to purchase power to bridge the gap between demand and supply without bothering for the financial problems of Discoms.
Now the Regulators have allowed in many states to add fuel charges from consumers every quarter to recover the cost of power purchase .As numerous generating plants have come up in private sector and the states have power purchase agreements with these power providers the state run thermal units have been forced to shut down in name of no demand. The fixed charges being incurred on the state sector generating thermal plants without any generation are forced upon the consumers . Punjab, Haryana and Gujarat are glaring examples in this regard.
The government claims that electricity ( amendment ) bill 2014 after incorporating the standing committee’s recommendations will be tabled in the winter session of Parliament and once the bill is passed the power sector reforms will face no hurdle in future. This is an wishful thinking on the part of government.
Different states suffer from a different combination of problems, including low tariffs, high technical losses and high percentage of subsidized consumers. under such conditions how the proposed amendments in electricity bill will improve the working of Discoms is beyond anyone’s imagination.
The Electricity Act 2003 made it possible for private companies to set up generating stations and supply electricity to the distribution companies. This was followed by providing cheap finances – priority sector lending of the nationalized banks was made available to private sector.
The distribution sector reforms were held to be the much more difficult ones than inducting private sector in generation. The reasons are obvious. They are spread over a much larger area, they have to deal directly with the consumers, and have to distribute electricity to rural areas. Every politician and bureaucrat has a different solution to the problems being faced by the power sector. But no one is interested in discussing the problems of power sector with engineers and employees who are to implement the decisions taken by the government. The problems cannot be solved by the governments without the help of persons dealing with the sector. The power sector reforms can be successful only when the centre and state governments listen to the views of technocrats .
The financial position of Discoms can be improved only if there is zero difference between per unit revenue received and cost of overall per unit supply with or without subsidy. Most of the state Discoms will go bankrupt once the electricity (amendment ) bill 2014 is implemented. In the end the whole exercise seems like another attempt to facilitate the privatization of power distribution system .All the state Discoms will become bankrupt after the proposed amendments as per Electricity (amendment ) bill 2014 is implemented .
Vinod Kumar Gupta
Spokesperson / All India power Engineers Federation

Cabinet may take up discoms burgeoning debt issue today

Financial bailout of Power Sector
Vinod Kumar Gupta

New Delhi: In view of the rising debt of power distribution companies, the Cabinet is likely to take up on Thursday the issue of tackling Rs 4.3 lakh crore loans of these discoms to bring down their liabilities.
Hit by subsidised tariffs, state electricity discoms are facing cash crunch and are incurring annual losses of about Rs 60,000-70,000 crore.
This is also affecting public sector banks as their bad loans are rising. The Power Ministry is working on a proposal to deal with over Rs 4 lakh crore loans of power distribution companies with a view to bring down their liabilities.
“Cabinet meeting that was scheduled today was deferred to incorporate this issue of mounting liabilities of discoms. The meeting is now scheduled for tomorrow,” a source said.
The debt burden has been one of the reasons for state power utilities not going in for new projects to raise electricity generation capacity. It has also forced them not to buy additional power, thereby creating peak hour deficits, the source added.
Meetings at the level of the Prime Minister’s Office have been held to clear roadblocks to stalled projects and the high debt of state utilities has been identified as the prime reason for the current state of the sector.
The government wants to draw a long lasting financial restructuring plan, in the form of a debt recast, that would provide incentives to discoms to generate more revenue.
Another senior official said under the debt recast plan, the discoms will get some relief by way of reducing interest rate.
That may be reduced from 11-12 per cent to 7-8 per cent.
Besides the repayment tenure could be stretched, he added.
Sources said after the debt recast, the interest liability of power distribution companies in the nine states will come down besides extension of their loan tenure will also help strengthen their financial position.
The loans to the discoms in 9 states including Uttar Pradesh, Tamil Nadu, Telangana, Rajasthan, Madhya Pradesh and Jharkhand add up to Rs 4.3 lakh crore. PTI

Protests planned at Power Ministers Conference, strike on Dec 8 Dt:27-10-2015

Before the nation-wide strike, the power employees and engineers will hold a massive protest at Kochi during the power ministers conference on November 6-7, All India Power Engineers Federation (AIPEF) chairman Shailendra Dubey, said in a statement ...
National Federations of Electricity Employees and Engineers would observe one-day nation-wide strike on December 8 to oppose the Government move to enact Electricity (Amendment) Bill, 2014, which it described as ''anti-people, one-sided and obstinate.
Before the nation-wide strike, the power employees and engineers will hold a massive protest at Kochi during the power ministers conference on November 6-7, All India Power Engineers Federation (AIPEF) chairman Shailendra Dubey, said in a statement here today.
"NCCOEEE has decided that a protest demonstration by around thousand power sector employees and engineers will be organised at the venue of the Conference at Crown Plaza, Marad, Kochi, from 1100 hrs on November 6 against the Government's ''one-sided and obstinate'' decisions to curb the right to electricity of the poor people through enactment of Electricity (Amendment) Bill,2014," Mr Dubey said.
Simultaneously, thousands of their counterparts will organise massive demonstration in all the states, he said adding that state and district-level conventions and rallies were being organised by the NCCOEEE constituents to spread awareness about the worst-implication of the Electricity (Amendment) Bill, 2014.
Mr Dubey alleged that while no heed was paid to the memorandum submitted by NCCOEEE to Parliamentary Standing Committee on Energy, the Government had accepted the points of business community to make the power sector as a platform of profit-earning, ignoring the vital issue of providing power to common people at affordable price.
He said that the government had even ignored the objections raised by 18 state governments, including Gujarat, to the Electricity (Amendment) Bill, 2014.
Ironically, most of the states were facing huge power shortage and discoms were reporting to be in debt-trapped due to wrong energy policies of Government, even though the country had idle installed generating capacity to the tune of 1 Lakh MW, Mr Dubey stated.
UNI MB JN1457

One Day Strike/ Work Boycott against Electricity (Amendment ) Bill 2014 Dt:03-08-2015

ALL OFFICE BEARERS – A I P E F CHAIRMAN / SECRETARY GENERAL – SIPEF/WIPEF/EIPEF/NIPEF PRESIDENT / GENERAL SECRETARY – ALL AIPEF CONSTITUENTS ?

It is learnt that Central Govt may place Electricity (Amendment ) Bill 2014 in this week any day in monsoon session of parliament which is likely to continue till 13th August, 2015. After suspension of 25 Congress MP's for five days & subsequently boycott of Lok Sabha for five days by Congress Party it has paved the path of parliament functioning therefore Central Govt has decided to place Electricity ( Amendment ) Bill 2014 in Lok Sabha for discussion any day. 2.You are aware that NCCOEEE has already served Strike / Work Boycott notice to Prime Minister with copy to Power Minister, Labour Minister & all Chief Ministers of State Governments. AIPEF has endorsed the decision of NCCOEEE in it’s federal executive meeting held in Delhi on 26th June , 2015 & AIPEF has also sent notice to all concerned. 3. As per notice served to PM and other authorities all power employees and engineers shall resort to one day Strike / Work Boycott on the day Electricity (Amendment ) Bill 2014 is placed before parliament. It means that we have to be prepared for one day Strike / Work Boycott any day till 13th Aug. In this context you are requested to mobilize your state unit accordingly with alert to proceed on one day Strike / Work Boycott. Therefore all state constituents are requested to inform all their members immediately to be ready for one day Strike /Work Boycott on only 24 hours advance intimation . 4. NCCOEEE notice & AIPEF notice are attached for ready reference. EEFI communication is also attached for information.