 "Appointment of distribution franchisee not against funding rule for power sector")
The state government has said appointment of private distribution franchisee for power bill collection and customer support does not violate the funding rule for grant under Restructured Accelerated Power Development and Reform Programme (R-APDRP) , which is available only to government-run power network entities.
It strongly demanded that the Central Electricity Supply Utility (Cesu), a power distribution company (discom) operating in the central part of the state, must get the fundings since it appointed private distribution franchisees within its jurisdiction areas to reduce transmission losses.
“The benefits to be accrued due to reduction of losses by franchisees will be passed on to consumer. Hence, benefit of grant under R-APDRP scheme may be extended to all 12 towns in the jurisdiction of Cesu,” the state energy department said in a letter to Ministry of Power, Government of India.
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Last week, Odisha had got assurance from the central power ministry that Cesu will get funds from this fiscal under R-APDRP. As per the assurance, an agreement will be signed among the ministry, Power Finance Corporation (PFC), Odisha government and Cesu for release of funds.
But the central power ministry had objected to the appointment of distribution franchisees in Cesu jurisdiction areas, saying it was not clear who will make investment for upgradation of power infrastructure and had sought some clarification in this regard.
Cesu has appointed three companies, namely Enzane Global Solutions, Feedback Energy Distribution Company and Riverside Utilities as distribution franchisee in Angul, Khurda and Athagarh electrical division.
The state energy department replied that Cesu will make the capital investment for upgradation of power infrastructure in the state despite the apportionment of distribution franchisee.
“As per distribution franchisee agreement franchisees are responsible for operation and maintenance for the LT (low tension) network along with carrying out billing and collection activities whereas the capital expenditure will be incurred by Cesu for development of infrastructure,” it clarified.
R-APDRP is aimed at upgrading the sub-transmission and distribution network, including energy accounting and metering in the urban areas having population of more than 30,000.
In November last year, the state government had given its consent to receive funds under R-APDRP, channelising them to distribution sector in Cesu area as per requirement of the scheme, undertaking responsibility of fulfilling the conditions prescribed in the scheme and accepting the obligation of the repayment of the loans.
Initially, the Centre has agreed to include two operational areas of Cesu- Bhubaneswar and Cuttack for funding.
The state government has identified 12 such towns that meet the criteria. The funding for all these towns has been estimated at Rs 410 crore. This includes Rs 190 crore receivable fund from the Centre and the residual Rs 220 crore to be raised by Cesu as counterpart funding.
Cesu is currently managed by Odisha Electricity Regulatory Commission (OERC).