September 17, 2023

Electricity ‘Reforms’ Spell Darkness for Farmers and Unending Profits for Power Giants

Vijoo Krishnan

THE Narendra Modi led BJP government has been going ahead with ‘reforms’ in the electricity sector in the fast-track mode. This is despite having promised the farmers in 2021 November, while being forced to withdraw the three Farm Acts, that the Electricity Act (Amendment) Bill would not be pursued without taking into consideration their concerns. His predecessor Atal Behari Vajpayee had in the year 2001 wooed American investors pointing to the inexhaustible avenues of profiteering in India by pointing to the new Electricity Bill on the anvil which aimed at deregulating the power sector and giving a freedom to the private players for taking decisions on generation, transmission and distribution by unbundling them. As ever it was argued domestically that the state electricity boards were making huge losses and in the name of efficiency and ‘greater consumer freedom’ the ‘reforms’ were inevitable.

However, it is notable that the general principle that was adhered to in the Electricity (Supply) Act, 1948 as also similar Acts governing state electricity boards has been to give emphasis on socio-economic development and the concept of social tariffs. Nothing was contained in these legislations to the effect that they should not make losses. This underlying principle determines the level of revenues from different classes and there is no relationship between the costs incurred in power generation and distribution to the consumer and the price paid by the consumer. The objective of providing highly subsidised power for agricultural development to address the food security of the nation, electricity for the poor etc., would lead to affordable prices for these consumers while the cost of this measure would be recovered from external source, such as government’s budget or from other classes of consumers. The idea of cross-subsidisation suggested by the Indian Statistical Institute also gained currency. It is this system that different regimes smitten by the neoliberal ideology and the corporate power monopolies have so doggedly sought to overturn. The resolute resistance of electricity workers, farmers and the toiling masses has stalled such efforts.

The Electricity Bill brought by the Vajpayee government in 2001 underwent many changes and was revised eight times before being passed in 2003 with only 59 members present in the parliament, an ignonimous feat matched only by the present incumbent’s penchant to pass a record number of important legislations in a matter of few minutes. The 2003 Act in Section 61 on tariff regulations was clear that the generation, transmission, distribution and supply of electricity are conducted on commercial principles; the tariff progressively reflects the cost of supply of electricity and also reduces cross-subsidies. The Act also overrode the Electricity (Supply) Act, 1948, Electricity Regulatory Commission Act, 1998. The Electricity (Amendment) Act of 2007 amended the provision in the above Act to eliminate cross-subsidies and omitted it. This was on the basis of the intervention of the Left parties who ensured that the common minimum programme of UPA-I gave an assurance in this regard.

Within six months of the Narendra Modi led BJP coming to power in 2014, yet another draft bill was brought without any thorough study of the existing scenario in power generation, transmission and distribution. Like many of the legislations including the Farm Acts and the labour codes brought at the behest of monopoly capital even as the masses reeled under an unprecedented pandemic and stringent lockdown, the doors were also sought to be unlocked in the electricity sector by reintroducing the amended Bill on April 17, 2020 and yet again on August 8, 2022. 

Public utilities under the unbridled control and ownership of private entities driven by the idea of unending profits is a sure-shot recipe for disaster in the lives of the beneficiaries. The Californian electricity crisis has lessons for India especially when the Narendra Modi led BJP government is going full steam ahead with the Electricity Act Amendment and smart meters. It was claimed that the reforms would ‘reward’ consumers with lower competitive prices, open the gates for private investments, boost the sagging economy and generate employment. What follows however is electricity shortages and skyrocketing prices for the consumers. Masses are rendered totally dependent on the private monopolies. The exercise of monopoly by the private power generators is witnessed in the wholesale electricity market, where electricity is sold to the utility distribution companies on the one hand and sales to end users of the electricity in the retail market by the private service providers on the other.  Emergence of discoms with monopsony power in purchase from generators and market manipulation by the generators could lead to a very chaotic power scenario.

As the power reforms met with resistance, the wily ruling classes in India tried to push it through firstly in the union territories. In Dadar and Nagar Haveli, all assets were transferred to Torrent, a Gujarat based company. This company in the fiscal year 2022-23 saw a 371 per cent rise in net profits from Rs 458.7 crore to Rs 2164.6 crore, while its income rose by about 80 per cent. The claim is similar to the claims made in California “to usher in efficiency”, “model for emulation” etc. The target is the annual revenue of the discom of the union territory which is around Rs 4,500 crore. As time passes, showing huge expenses in modernisation of grid technology and other reasons, the burden could be passed on to the unsuspecting customers who by then would have no option but to pay through their nose or be plunged into darkness. Similar efforts to hand-over to Adanis in Maharashtra, RP Goenka group in Chandigarh and efforts in Jammu and Kashmir as well as Pondicherry were successfully resisted by the united struggles of electricity workers and consumers.

The usual suspects under the present regime, the Adanis, the Ambanis and the Tatas are also into the power sector in a big way. Adani Power Limited mentions on their site that it is “the largest private thermal power producer in India second only to the NTPC Ltd with an installed capacity of 13,650 MW”. Adani Green Energy Ltd (AGEL) is also the biggest player in the renewable energy sector, developing a renewable portfolio of 25 GW by 2025 including wind power, solar power, and hybrid power projects. They control about 22 per cent of private thermal power capacity, the largest number of solar and wind plants and 51 per cent of India’s private electricity transmission according to reports. Adanis have a presence literally in all stages of the supply chain to provide electricity to the masses from control over coal – both domestic and international sources including from Australia, control over ports, airports, power generation, renewable energy sector and distribution as well as transmission lines. Anil Ambani’s Reliance Power Limited and Tata Power Limited are some other players but none have the Adani-kind of strangle-hold on different sectors mentioned above. A distant future where the thermal energy may be replaced with “green” renewables is also a future where the Adanis will determine the rules of the game.

The next conspiracy is to isolate the poor and the farmers. Feeder segregation or isolation of rural feeders will create an impression that agricultural users/farmers are getting undue benefits.  Smarting from a series of humiliating losses handed over to them by the united struggles of workers and peasants, they have also now come with what they deem their smartest move “smart meters” that would usher in pre-paid meters. States are being threatened with cuts in subsidies/allocations under different schemes like the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), Integrated Power Development Scheme (IPDS), Restructured Accelerated Power Development and Reforms Programme (R-APDRP) if they do not comply. At one stroke the real-time data of 26 crore households would come under control of these big private monopolies who return the favour to the ruling classes that did their bidding. The humongous cost of at least Rs 2 lakh crores, once every six years to install meters would be passed on to the states and consumers while the power giants will fill their coffers. If the pre-paid meters reach zero it leads to instant disconnection and Rs 500 fine for reconnection. Imagine such a case at the peak of summer or winter for the consumers or at the peak of a drought for farmers looking to irrigate their crops. Like the Californian masses were denied electricity amidst a freezing winter, companies driven only by the motive of amassing profits with zero concern for anything else can resort to any drastic move. Consumers could literally be made to pay through their nose. The BJP led union government’s target is to segregate all agricultural feeders by 2025 April. To meet that deadline it is resorting to intimidation and the threat of cutting allocations and subsidies for states that do not fall in line.

What will this mean for farmers? All tube-wells and irrigation motors will be connected with smart meters. If 34 units are used in six hours at Rs 10/unit, it will cost Rs 340/day or Rs 10,200/month for a 7.5 hp pump. A recurring cost of about Rs 15,000 once every six years to replace the meters will also fall on consumers. The entire idea of cross-subsidisation, free power for agriculture and the poor will be put to eternal rest. This is the reason why farmers are up in arms and uprooted smart meters in Uttar Pradesh and Andhra Pradesh. There would be different enticements put before consumers like direct benefit transfer etc., like the Andhra Pradesh government is presently doing. Farmers in Vizianagaram have reported that their bills are coming as high as Rs 7500/month for a 3 hp pump but the YSRCP government is claiming that farmers need not worry as the amount would be transferred to their accounts directly. Falling for such enticements would be the death knell for peasant agriculture and food security of the nation. It is something that all sections should unite to resist. The Kerala LDF government has shown the way in resisting the TOTEX model (Total Expenditure Model) smart meters and asserted that they will not allow the farmers and the consumers to be adversely affected. This was also as a result of the timely intervention of the Centre of Indian Trade Unions and the Electricity Employees Federation of India who called the bluff of the bureaucracy that was trying to surreptitiously go ahead along the road-map set by the union government. May there be many more such centres of resistance. Against darkness and destruction; against deceit and corporate loot, let us unite.

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