The Odisha Government has opposed the move of the Union Government to treat Indian Railways like a power distribution company. Energy Secretary Hemant Sharma on behalf of the State Government has presented a memorandum to the Union Government in Ministry of Power in this regard, while urging to shelve such proposal.
Earlier he had raised the issue in recently held All Power Ministers’ Conference, which was attended by the Ministers and Secretaries of the State Governments. Sharma has pointed out that Centre’s proposal to treat Indian Railways as “Deemed Distribution Licensee” shall seriously affect the business model and financials of the DISCOMS.
Odisha has four DISCOMS such as Cesu, Nesco, Southco and Wesco, which are supplying power to Indian Railways as “consumer” and, accordingly, they have entered into long term power purchase agreements for the requirement of the railways.
Sharma pointed out that under the Electricity Act, 2003, there are certain technical, operational and commercial considerations, which need proper adjudication in matter of Indian Railways to have licence for the distribution and supply of electricity. So, the Indian Railways cannot get such a status and the issue is being contested in different judicial and regulatory forums, pointed out Sharma.
It is relevant to mention that in States like Telengana and Madhya Pradesh, the respective State Electricity Regulatory Commissions have not exempted Indian Railways from payment of cross subsidy surcharges.
The National Electricity Policy lays down that the amount of cross-subsidy surcharge and the additional surcharge to be levied from consumers who are permitted open access. Indian Railways is having open access for power consumption. Accordingly, the State Government has suggested that the decision to consider Indian Railways as a DISCOM is considered to be shelved.
The proposal of Union Government will prove detrimental to the DISCOMs and may not be in the overall interest of the power sector in the country. Raising another issue of importance, Sharma said cess collected by the Union Government on coal used for power stations are not shared by the State, which is producing coal.