Odisha Opposes DISCOM Tag For Railways

Odisha Government has opposed the move of the Union Government to treat Indian Railways like a Power Distribution Company instead of as a Consumer.

Hemant Sharma, Secretary Energy on behalf of the State Government has presented a Memorandum to Union Government in Ministry of Power in this regard, while urging to shelve such proposal.

Earlier he had raised the issue in recently held All Power Ministers’ Conference, which was attended by the Ministers and Secretaries of the State Governments.

Mr.Sharma has pointed out that Centre’s Proposal to treat Indian Railways as “Deemed Distribution Licensee” shall seriously affect the Business Model and Financials of the DISCOMS.
Odisha has four DISCOMS-CESU, NESCO, SOUTHCO and WESCO, which are supplying power to Indian Railways as “Consumer” and accordingly they have entered into Long Term Power Purchase Agreements for the requirement of Railways.
Mr.Sharma pointed out that under the Electricity Act, 2003, there are certain Technical, Operational and Commercial Considerations, which need proper adjudication in matter of Indian Railways to have License for the Distribution and Supply of Electricity.

So Indian Railways cannot get such a status and the issue is being contested in different Judicial and Regulatory Forums, pointed out Mr.Sharma.

It has been pointed out that this is relevant to mention that in States like Telengana and Madhya Pradesh, the respective State Electricity Regulatory Commissions have not exempted Indian Railways from payment of Cross Subsidy Surcharges.

National Electricity Policy lays down that the amount of cross-subsidy surcharge and the additional surcharge to be levied from consumers who are permitted open access. Indian Railways is having open access for power consumption.

Accordingly the State Government has suggested that the decision to consider Indian Railways as a Deemed Distribution Company (DISCOM) is considered to be shelved.

This proposal of Union Government will prove detrimental to the Electricity Distribution Companies (DISCOM)s and may not be in the overall interest of the Power Sector in the country.

Raising another issue of importance, Mr.Sharma said Cess collected by the Union Government on coal used for power stations are not shared by the State, which is producing coal.

Production of coal in the state concern, results in a number of negative impacts including serious environmental and social impacts.

Odisha, being the major coal bearing state is having air and water pollution, land erosion and pollution due to coal washing on environmental negativity front.

Similarly, social front the State is facing displacement issues like rehabilitation, resettlement and health hazard including air and water problems.

Roads are being damaged due to transportation of coal and the State has to spend huge funds for maintain road and other communication infrastructure.

Under this backdrop, Odisha has demanded equitable sharing of Revenue between State and Centre, at least 60 percent of the Cess collected from Cess on coal used for power generation and other activities should be allocated to the Host State, urged he.

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