People’s Committee for Struggle Against Electricity Privatisation in Pune, Maharashtra formed to oppose Smart Prepaid Meter Policy

 

Press Note by People’s Committee for Struggle Against Electricity Privatisation, Pune

(Translation of Press Note and Leaflet in Marathi)

People’s Struggle Committee Against Electricity Privatisation, Pune

Pune

Date: 28 January 2025

Press Note

People’s Struggle Committee Against Electricity Privatisation Strongly Opposes Smart Prepaid Meter Policy

The People’s Struggle Committee Against Electricity Privatisation formed in Pune strongly opposes the Maharashtra State Electricity Distribution Company’s decision to install 2 crore 65 thousand smart meters in the state. The smart meter policy is against the interests of electricity consumers regardless of whether the smart meters are installed by the state distribution company, private franchisees of corporate houses, or private companies. This policy is a step towards the privatisation of the electricity sector of Maharashtra. The fundamental objective of this policy is to ensure profit of the private companies in the electricity generation sector.

Currently, more than half of Maharashtra’s electricity generation capacity is in the hands of private industrialists like Adani, Tata, Jindal, Torrent, etc. That is, 60% of the state’s electricity generation is with the private sector. Energy generation through renewable solar and wind sources is entirely captured by the private sector, which has capital investments in power generation. Mahavitaran (state discom) has signed many long-term agreements with private electricity companies. Unrealistic agreements have been signed without thinking about future demand; thus, even if private sector power is not used, the private generation companies have to be paid thousands of crores as standby charges.

Loot via Prepaid Meter Rates

As per the rate fixed by the Central Electricity Regulatory Commission, single-phase smart meters will cost Rs. 2610 and three-phase meters will cost Rs. 4050. Adding costs of prepaid technology and maintenance, the smart prepaid meter rate stated in April 2023 tenders was approximately Rs. 6320. In reality, however, each meter is being bought at Rs. 11,987 as per the purchase agreement signed in August 2023, which is twice the actual price. That is, each meter will cost Rs. 12,000, and Mahavitaran company will spend approximately Rs. 40 thousand crores. For this purpose, Mahavitaran will take a loan of Rs. 25 thousand crores. The state administration and management are spreading false information that prepaid meters will be paid for by Mahavitaran. Of the meter’s cost of Rs. 12,000, only Rs. 900 will be subsidised by the central government. The remaining Rs. 11,100 will be imposed on power consumers in the form of increased power rates. This is because Mahavitaran can repay the principal amount and interest on its loan of Rs. 25,000 only by increasing power rates.

Intention to Capture the Entire Power Sector Through Smart Meter Policy

Through the smart prepaid meter policy, private companies want to dominate the power generation, transmission and distribution sectors. In Maharashtra, the Adani company has a power generation plant and has also entered the transmission sector. The company is now trying to enter the remaining distribution sector of Mahavitaran, which is clearly evident in its request for a parallel license for distributing electricity in Navi Mumbai.

Because of the smart meter policy, the power sector will no longer remain a public sector; instead, it will become a means for establishing the monopoly of profit-making capitalists. This policy is nothing but a smart step in the direction of privatising the electricity sector. The advance payments of power consumers will enable private businesses to get thousands of crores of rupees for their own businesses and power plants, which is a huge benefit for them.

People’s Committee for Struggle Against Electricity Privatisation, Pune

To,
Respected Correspondent
Newspaper: _______
Requesting your cooperation in publishing the above news in your reputed newspaper.

 

People’s Committee for Struggle Against Electricity Privatisation, Pune

Prepaid Smart Meters: Highlights

  • The central and state governments have stated that prepaid smart meters will be installed so that power consumers can see their power consumption, pay their bills in time, and conserve electricity to reduce their power expenditure. In reality, the existing meter system of Mahavitaran is smart and digital, and power consumers can determine their power consumption based on daily meter readings. Furthermore, Maharashtra’s power consumer is definitely wise enough to understand that electricity is not a luxury item and excessive use will lead to high bills. Therefore, the government’s claim is clearly deceiving.
  • While the basic facilities of electricity-water are in the concurrent list of the central and state governments, state governments have the right to take independent decisions. However, the central government is in a rush to centralize all rights related to electricity. Owing to the strong opposition to this of farmers, electricity workers and consumers, and ministers, the government has resorted to taking advantage of certain provisions of the Electricity Act of 2003, finding ways such as smart prepaid meters, the franchisee system, and parallel licensing to privatise the power sector.
  • The smart prepaid meter policy has been enforced by the central government and will weaken the power sector economically. On 25 August 2022, the Maharashtra state administration decided to install 2 crore 25 lakh 65 thousand smart meters. For this policy, Rs. 39,603 crores will be spent. On 7 August 2023, approval letters were given to four suppliers, details of which are given below.
  • Of the above, Messrs. Adani and Genus are the only companies with experience in this sector. The other two companies have no previous experience in the power sector or in the metering system. Genus is a manufacturer of meters. The other three companies will buy meters from other suppliers. Thus, there is no guarantee of the quality and flawlessness of the meters that will be installed.
  • According to the rate fixed by the electricity regulatory commission, single-phase smart meters will cost Rs. 2610 and three-phase meters will cost Rs. 4050. The rate for prepaid meters estimated in April 2023 tenders was Rs. 6320. In reality, however, smart meters have been bought for Rs. 11,987 as per the purchase agreement of August 2023, which is twice the actual cost. That is, each meter will cost Rs. 12,000, and Mahavitaran company will spend around Rs. 40,000 crores. For this purpose, Mahavitaran will have to take a loan of Rs. 25,000 crores.
  • The administration and company management are spreading false information that Mahavitaran will bear the cost of smart meter installation. Of Rs. 12,000 required for each meter, only Rs. 900 will be subsidised by the central government. The remaining Rs. 11,100 will be imposed on power consumers in the form of increased power rates. This is because Mahavitaran will have to increase power rates in order to raise money to repay the principal amount and interest on its loan of Rs. 25,000 crores. Similarly, maintenance charges of Rs. 100 will be collected every month.
  • It is also claimed that prepaid meters will reduce power theft. However, this is entirely false. Power theft can only be stopped by going to the physical location where it is done. If a consumer’s prepaid recharge is over and the company has disconnected power supply through the meter, the consumer can still bypass the meter and steal power.
  • Prepaid meters have been installed in Uttar Pradesh and Bihar, and even after 2 years, consumers complain of being billed for two to three times their actual consumption. There are complaints of meter jumping. Consumers in Rajasthan and Haryana have had a similar experience. If there is any issue in the system of private suppliers, power supply to lakhs of consumers may be affected all at once. The money in one’s account can also completely disappear, as has been experienced in Uttar Pradesh and Bihar.
  • In places without internet, android smart phones, or network, people can face many challenges in recharging their accounts in time. Such consumers may face frequent power disconnections.
  • The company installing the meters will have all the data of consumers as well as the right to collect bills. So, if a consumer gets the wrong bill, who will correct it? In such cases, consumers will have no choice but to put up with the darkness.
  • So far, the State Electricity Regulatory Commission has not approved this policy. Senior directors of Mahavitaran company have stated that as this is a central government policy, approval of the State Electricity Regulatory Commission is not necessary, which is a clear lie. As per capital expenditure regulations, policies requiring expenditure of more than Rs. 25 crores and those that are partially subsidized have to be pre-approved by the commission.
  • Article 47(5) of the Electricity Act of 2003 states that electricity consumers have the right to decide whether they want a prepaid or postpaid meter, and no distribution company can impose mandatory prepaid meters. On 2 July 2024, Hon’ble Chief Minister and Energy Minister Shri Devendra Fadnavis ji had provided assurance in the Vidhan Sabha that smart meters will not be installed for domestic electricity consumers. Despite this, the process to implement this policy is rapidly underway.
  • The prepaid meter system will remain in the hands of the companies that are supplying meters for 10 years. If these companies get electricity distribution licenses, then the assets of the public sector electricity company will be handed over to private owners at no cost.
  • Around 25,000 posts in prepaid meter billing and maintenance will be removed. This will close the doors to employment for ITI, B.Com., B.A. students from ordinary families and increase unemployment.
  • Simultaneously, the administration and Mahavitaran management are taking steps to privatise the operations of 350 substations in the state. This is the next step of privatisation. Efforts towards implementing parallel licensing and the franchisee system in some districts is gaining momentum on higher levels.
  • The process that has been started as per the policies and orders of the central government is the process of privatising the entire electricity sector. Electricity will no longer be an essential service. According to the central government’s policy, electricity will become a commodity for sale traded in the open market. The 2.25 crore electricity consumers of the state will be the first victims of this policy.
  • Considering the above points, none of the aspects of prepaid meters benefit power consumers. Therefore, we request common citizens, electricity consumers, social organizations, and electricity workers to oppose this policy.

 

 

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