Government Mulls Imposing a Penalty on DISCOMs for Unscheduled Power Cuts

The Minister for Power R.K. Singh has said that the government will soon approve the Power Tariff Policy which would impose a penalty for unscheduled power cuts by distribution companies.

The policy is expected to come into effect from April 1, 2019.

News agency PTI quoted Singh as saying, “The proposal for tariff policy is ready and will soon go for the cabinet’s approval. The policy provides for penalty for unscheduled power cuts except in the case of technical faults or act of God (natural calamities).”

Singh also informed that state power regulators would ascertain the penalty on distribution companies for voluntary load shedding.

The proposal to penalize distribution companies has been doing the rounds for years now, though little progress has been made in the matter.

For instance, back in December 2017, in an effort to ensure reliable electricity services for all Indians, Singh had announced a plan to penalize distribution companies if they indulge in gratuitous load-shedding. There was consensus among states to bring down DISCOM losses to below 15 percent by end of March 2019.

In a similar vein, back in April 2018, the Lieutenant Governor of Delhi, Anil Baijal, had approved the proposal put forward by the Aam Aadmi Party government regarding compensation for residents in case of unscheduled power cuts. The proposal entailed an hourly compensation of ₹100 (~$1.519) for unscheduled outages by distribution companies in the national capital. The compensation earned by consumers was to be adjusted against their monthly power bill.

If this policy is finalized and brought into action, it will be a tremendous relief to millions of consumers and to power generators. However, load shedding tends to get better in most states around election time and hopefully this is a more permanent solution.

Image credit: Flickr

Saumy Prateek Saumy is a senior staff reporter with MercomIndia.com covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.