Workers and users of electricity, let us not be fooled by “smart” meters!

Electricity is a basic necessity of modern life. Making it available at an affordable price is the responsibility of the government. Instead of fulfilling this responsibility, the Central Government is taking steps that will make electricity out of reach for many people, in order to guarantee maximum profits for private companies.

Protest-in-Jammu-against-installation-of-prepaid-electricity-meters
Protest against smart meters in Jammu (file photo)

The Central Government has decided to install 25 crore pre-paid smart electricity meters all over the country by 2025.  Government spokesmen claim that the aim of this project is to improve the quality, reliability and affordability of power supply.  The real aim is to pave the way for privatisation of electricity distribution.

A smart meter is a device that provides two-way real-time communication between the consumer and electricity distributor about electricity usage. The distribution company does not have to send a person to read the meter to know how much electricity has been consumed. A consumer can know how much electricity is being consumed on a day-to day basis.

The smart meter project is being carried out as part of the Revamped Distribution Sector Scheme (RDSS), launched by the Central Government in July 2021 with an outlay of Rs. 3,03,758 crores. One of the stated aims of this scheme is to reduce the Aggregate Technical & Commercial (AT&C) Losses in electricity distribution to 12-15% at the all-India level by 2024-25.

Under the RDSS, the Central government will provide funds to every distribution company (DISCOM) up to 15% of the cost of meter or Rs 900 per meter, whichever is lower. For North East and hill states, it will give up to 22.5% of the cost or Rs 1350 per meter. This is an incentive to DISCOMs to implement the Prepaid Smart Metering scheme. The incentive will be paid only if the smart meters are installed by a private company, under a Public-Private Partnership (PPP) arrangement.

Protest-in-Jammu-against-Smart-meters
Protest against smart meters in Jammu (file photo)

The government claims that pre-paid smart meters will be of benefit to consumers.  However, if the real aim is to benefit consumers, why is the government insisting on the PPP mode? Why can it not be implemented by a state-owned DISCOM without involving any private company? The condition that it must be done only under PPP mode shows that the real aim is to make electricity distribution attractive for privatisation.

While the objectives of the RDSS of reducing the technical and commercial losses and improving the efficiency of the electricity distribution system are desirable, the problem is that the benefit of the improvement will not accrue to power consumers.  This is shown by past experience. The AT&C losses for the country have come down from around 28 percent in 2011-12 to 17 percent in 2021-22, but the power rates have risen year after year during this period. The gains of improvement have been completely cornered by the generating and distribution companies to improve their profitability.

The anti-social privatisation program of the power sector began in the 1990s in the sphere of power generation. Long-term power purchase agreements were signed by the authorities with various private companies, Indian and foreign. It led to huge private profits for the monopoly capitalists who invested in power generation. It led to a large increase in the price that state electricity boards had to pay for power.

Following the privatisation of electricity generation, various state governments have attempted to privatise power distribution. Private power distribution companies operate in some cities like Mumbai and Delhi. But the attempts of many states and union territories like Jammu & Kashmir, Uttarakhand, Puducherry, Uttar Pradesh, Chandigarh in this regard have been blocked by the militant struggles of the workers.

The installation of smart meters is now being undertaken to pave the way for privatisation of the most lucrative operations of the DISCOMs.

The private power monopolies have been asking the government to address various problems affecting the finances of the state-owned distribution companies (Discoms) to make them lucrative for their large-scale privatisation.  They want all subsidies on electricity to be discontinued and power tariff to be revised every year to cover all costs. Any subsidy given to a group of consumers should be through Direct Benefit Transfer (DBT) system. This means every consumer must first pay full price of electricity which will be significantly higher than today for most consumers, before receiving any subsidy due to him/her.

The capitalist owners of private power companies want a system to be created so that there are no over-due bill payments from any consumers, including government consumers. They want the AT&C losses to be minimised so that cost of the most of the power supplied is realised. Further, they desired that the government should modernise the distribution infrastructure with public money before they take over.

The prepaid smart metering scheme along with the other components of the Revamped Distribution Sector Scheme (RDSS) addresses all the demands of the monopoly capitalists. The prepaid smart metering scheme will ensure that consumer pays before consuming power and the power supply is stopped automatically when the pre-paid amount is exhausted. Tens of thousands of crores of rupees will be available for use of private power monopolies once the pre-paid system is enforced. The distribution infrastructure will get modernised and losses minimised. The cost of installing pre-paid smart meters and their replacement, when the life is over, will have to be borne by the consumers.

By making the meters pre-paid, the electricity supplier is assured that only that much electricity is supplied for which money has been paid in advance. Power supply can be stopped remotely, without the need of a person coming to physically disconnect it.

In addition to the consumers, power sector workers will also be adversely affected. With the installation of prepaid smart meters and management of the billing system by private monopolies, large number of workers of every Discom will losetheir jobs. In just one state of Tamil Nadu, unions estimated that nearly 20,000 workers will be affected.

Power sectors workers will be further hit when Discoms are privatised. Privatisation has invariably led to loss of job security, large-scale replacement of permanent jobs with contractual jobs and curtailment of workers’ benefits.

Pre-paid smart meters are neither in the interest of power sector workers nor in the interest of people of the country. They will only benefit monopoly capitalists who now wish to control the entire power system of the country.

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