Pvt franchisees in power sector will lead to cherry-picking: TN CM

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SME Times News Bureau | 08 Jul, 2020
Tamil Nadu Chief Minister K. Palaniswami on Wednesday told the central government that allowing private franchisees in power sector will lead to cherry-picking.

He also said that the free power supplied to agriculture sector and households should not be brought under the direct benefit transfer (DBT) scheme.

In a letter to R.K. Singh, Union Minister of State (Independent Charge) for Power and New and Reweable Energy, Palaniswami said some of the provisions mentioned in the draft Electricity (Amendment) Bill, 2020 are detrimental to the state government/state utilities.

"Provisions in the draft Amendment Bill to allow private franchisee/sub-licencee will only lead to cherry-picking of remunerative areas by the franchisee/sub-distribution licencee, affecting the DISCOMs directly and thereby the public interest. The state discoms will be left with serving social sector obligations and rural areas which will result in massive losses to the discoms," Palaniswami said.

Palaniswami also said it is unacceptable to fix hydroelectricity purchase obligations separately to a state like Tamil Nadu as it is seasonal and monsoon-dependent, which is not in the control of power distribution companies.

"To avoid disparity among the States with different sources of renewable energy available, it is suggested that Renewable Purchase Obligation (RPO) can be fixed for total renewable energy rather than independently fixing for solar, non-solar, hydro etc," the Tamil Nadu Chief Minister wrote to Singh.

Welcoming the central government's liquidity infusion package of Rs 90,000 crore to power distribution companies for clearing their dues, Palaniswami said the central government should relax the norms for working capital under the Ujwal DISCOM Assurance Yojana (UDAY).

He also said the state's power utility Tamil Nadu Generation and Distribution Corporation Ltd has already applied for the financial assistance of Rs 20,622 crore to Power Finance Corporation (PFC) and Rural Electrification Corporation (REC).