AAP’s power subsidy promise at the core of electoral battle with BJP in Goa

On Monday, 26 July 2021, Delhi’s Power Minister Satyendar Jain will be in Goa. He accepted Goa’s Power Minister Nilesh Cabral’s challenge to debate the possibility of the power subsidy that AAP’s party chief Arvind Kejriwal promised to the citizens of Goa.

On Wednesday, 14 July, Aam Aadmi Party national convener and Delhi chief minister Arvind Kejriwal had kickstarted his party’s campaign for the state assembly elections scheduled early next year by promising every Goan family 300 units of free electricity per month if AAP is voted to office.

He had also said they would waive off all pending power dues and provide free electricity for agricultural purposes.

“Goans are fed up with inflated power bills. AAP will guarantee 300 units of free electricity every month for every Goan family when AAP forms the government,” the Delhi CM had shared with reporters.

In November 2020, Nilesh Cabral had challenged AAP to debate the ‘power model’ of Goa and Delhi respectively. Raghav Chadha had accepted that challenge then but after Cabral did not respond, Delhi Jal Board Vice Chairman and Party’s National Spokesperson Chadha had alleged that the BJP high command hadn’t permitted Cabral to follow through with the challenge.

After the CM’s visit, Chadha posted a video message BJP and Nilesh Cabral in which he stated that the BJP-led Goa government had got a ‘440 watt’ shock after AAP’s announcement on 24×7 free electricity supply to all Goan houses. He accepted Cabral’s challenge to debate yet again, to which Cabral responded by saying he would prefer engaging in a debate with the Delhi Power Minister instead.

On Tuesday, Prudent Media, a Goan TV Channel, put out a tweet that read ‘Power Minister Nilesh Cabral says if AAP leader Raghav Chadha was Delhi Power Minister he would sit for a one on one debate; I don’t want to sit with Chadha’.

Reacting to this tweet, Delhi’s Power Minister Satyendar Jain tweeted, ‘Nilesh Bab, I heard u have said that u would like to debate with power minister of Delhi on AAP’s free and 24x7 electricity announcement. I accept ur challenge. I will be in Goa this Sunday. I hope Sunday 3 pm is ok with u for the debate. See you there’.

In this public exchange between the Goa and Delhi administration, a larger story on power must be told.

Interestingly, though not a story told often, but AAP’s solutions to power woes are pragmatic and fiscally prudent. While BJP Delhi, as well as BJP Goa, have dubbed these subsidies as populist moves that burden the exchequer, it is important to understand that Satyendar Jain’s Power Department has made these subsidies possible by improving infrastructure, focussing on generation of cleaner, cheaper energy and severely cutting down on corruption in the power sector.

Both Delhi and Goa face the same core problem – that they are net consumers and not producers of energy, which means that the energy being purchased from other states exceeds the energy being sold to them.

So, the steps AAP took to reform Delhi can be replicated, to a certain extent, in Goa. On the generation side, for instance, Satyendar Jain’s Power Department put its energy into contesting Central Electricity Regulatory Commission (CERC)’s tariff determination consultation paper when it was in the public domain. Now, it is interesting to note that Delhi gets 80-85% power (Long term PPAs) from Central Sector Generating stations (CSGS) whose tariffs are fixed by CERC. AAP leveraged its position as political party to question the CERC. For access to cheaper power, existing PPAs were negotiated.

The Power Department of Govt of NCT of Delhi realised that Delhi must not be forced to buy expensive power from high cost power stations. The other problem was the lack of coal linkage from nearby coal mines. Coal is transported to the capital from as far as 1,700 kms resulting in high cost of coal transportation. Moreover, the coal sector is unregulated and monopolistic which results in high coal prices. Given the multiplicity of concerns shrouding coal, the government made attempts to switch over to alternate sources of energy, particularly solar. The Rajghat Power Plant is being converted into a 5,000 KW-generating solar park. This coal-based plant was lying shut since 2014.

The Power Department also incentivised the conversion to solar as a source of energy with finance models like RESCO. In which there is no upfront investment required for the installation of solar plants; the said rooftop system is owned by a third party who sells the solar energy directly to the owner or any other captive consumer or even to a distribution company following a Power Purchase Agreement, and CAPEX, wherein the rooftop owner hires a system integrator/EPC company to install the rooftop SPV system by making the necessary investment.

The Delhi power department has ensured that 80 percent of the arrears collected by the discoms are remitted to the Delhi Transco Limited — the State Transmission Utility (STU) of Delhi — rather than the Holding Company, which has made the state richer and arrears transferred to DTL from the discom bolstered investments in transmission infrastructure across the city. The discoms were made accountable to the public through cases in the judiciary, audits by the CAG, public participation by MLAs at DERC, and government submissions. As a result, Delhi became the only Indian city to provide cheap and clean 24x7 electricity with zero tariff hikes in the last five years. The economics behind such moves is lost in the political rhetoric between BJP and AAP.

In February 2020, the state electricity department’s sent out a proposal seeking permission from the Joint Electricity Regulatory Commission (JERC) to hike power tariff by 3.84 per cent during a public hearing held in Goa. The grievances were directed at the fact that the department had failed to provide affordable, clean and continuous power supply and should look for different ways of revenue generation to fill the revenue gap of Rs 372.41 crore (2020-21) instead of hiking the fare and making the common man pay for the system’s incompetence.

In June 2020, JERC recommended a 5.31% increase in power tariff, which is higher than the 3.84% hike proposed by the Goa electricity department. The energy charges for both domestic and commercial connections, from low to high tension connections, were hiked. Power minister Cabral had then requested CM Pramod Sawant to not bring the tariff into force. The JERC had cautioned the government against its overreliance on its budgetary support, which is not sustainable in the long run.

As per the Statistical Handbook of Goa, 2016-17, the state has purchased around 26,235 MKWH of energy in a span of seven years. During the same course of time, the state has sold only 21,019 MKWH of energy - accounting for a deficit of around 5,216 MKWH of energy. This translates into a no less 750 MKWH (approximately) of energy deficit per year in each of the last seven years.