Kerala has conveyed its strong reservations to the Centre regarding a proposal to allow electricity distribution companies (discoms) to automatically recover their additional spending on power purchases on a monthly basis from the consumers. Discoms may ‘‘generate undue advantage’‘ in such a scenario, according to the State.
It would lead to an 'unstable pricing situation' akin to the one in the petroleum sector and subject electricity consumers to frequent price fluctuations, the State government has informed the Union Power Ministry in response to comments invited on the draft Electricity (Amendment) Rules, 2022. The Power Ministry had invited comments from the States after publishing the draft in early August.
In its response, Kerala noted that the ''suggested process of automatic transfer of impact of cost to the consumer may lead to a situation wherein the consumer, being at the receiving end, will be subjected to fluctuations in the price frequently.''
