Report by Kamgar Ekta Committee (KEC) correspondent
On Monday, 23 June, Maharashtra Electricity Regulatory Commission (MERC) issued notices proposing to grant parallel electricity distribution licenses to Torrent Power Limited (TPL) and Adani Electricity Navi Mumbai Limited (AENML) for some of the most profitable areas of Maharashtra. This is a direct attempt to privatise power distribution in the state. AENML and TPL first published notice of their application for license in November 2022 and January 2023, respectively. The two companies have sought parallel distribution licenses for the following areas:
MERC’s recent notices note that “On consideration of the material available on record, the Commission is satisfied that prima facie the applicant qualifies for grant of Distribution licence for the proposed area of supply.” The MERC has invited public suggestions and objections to the proposal till 16 July, to which the companies are expected to reply by 19 July. An online public hearing will be held on 22 July at 10.30 am (for AENML) and 11 am (for TPL).
Further, Tata Power has applied for the distribution license for Chhatrapati Sambhaji Nagar, Badnapur, Jalna Taluka and Waluj MIDC.
The municipalities and regions mentioned above are some of the most profitable regions in Maharashtra. In all these areas, power is currently distributed only by the state discom Mahavitaran, except in Thane district, where TPL is operating in some regions like Kalwa and Bhiwandi under the franchisee system. Electricity distribution in other highly profitable parts of the state such as Mumbai has already been privatised.
A private company is driven solely by profit. Private companies will focus only on large profitable consumers and leave small consumers and consumers in remote areas to Mahavitaran. That is why, the areas chosen by the private companies are highly urban, commercial, industrial, and profitable.
Under the distribution licensing arrangement, Mahavitaran is required to provide its vast existing distribution infrastructure to private player who is given the license against payment of a fee. The vast distribution network for electricity has been created using people’s money; our money will now be used to enrich big corporates. Allowing more distributors is a part of the plan to hand over the thousands of crores worth of distribution network of Mahavitaran built over decades to private players. The private companies will generate profit from power distribution without making any investment in the distribution infrastructure! Once all large and profitable consumers are taken away by private companies, Mahavitaran will be left with only small consumers and consumers who today are eligible for subsidised electricity.
Soon the losses of Mahavitaran will soar up and will have to be compensated by levying more taxes on people. After some time, we will be told that the government cannot continue to bear the losses of Mahavitaran so it must be privatised. Assets worth tens of thousands of crores of rupees, built with public money, will then be sold at throw-away prices to big corporates.
Many of us will get inflated power bills, which we will be asked to pay first or else the private company will disconnect the power. If farmers stop getting subsidised power, food prices will go up.
The government claims that the entry of a private distributor in competition with Mahavitaran will allow consumers to “choose” the distributor they like and that competition will make electricity cheaper. However, in Mumbai, where both Tata and Adani distribute power, consumers effectively have no choice, and the rates are among the highest in the country. The claim about “choice” has been made only to win people’s support for parallel licensing.
In Nagpur, Aurangabad, Jalgaon and in many other places all over the country, private companies ran away from parallel distribution and franchisee systems when they did not make the expected profits. Government discoms had to take them back at the cost of hundreds of crores of rupees of public money. All over the country, people have experienced that after calamities like floods, cyclones, big accidents, COVID, etc., state discom workers promptly restore power, whereas private companies run away.
While several attempts for electricity privatisation have been made in Maharashtra, these attempts have so far been stopped because of the strong opposition of workers and consumers.
Electricity workers and consumers must unitedly oppose the plan of issuing parallel licenses to private companies in Maharashtra. We must firmly declare that electricity distribution is not a business, it is a service and it should remain a public service. It should not be sold for private profit! We must not allow a fundamental need like electricity to be privatised!