Opposition likely to unite in House against draft electricity bill
On April 17, the Centre issued a draft proposal for the amendment of Electricity Act, 2003, in the form of draft Electricity Act (Amendment) Bill, 2020 , inviting comments from stakeholders within 21 days. The deadline was later extended till June 2.Updated: Jun 09, 2020 21:38 IST
The proposed Electricity (Amendment) Bill that several states say undermines India’s federal structure and attempts to privatise distribution could be the next flashpoint between the government and the Opposition.
Parties such as the Congress, Telangana Rashtra Samithi (TRS), Dravida Munnetra Kazhagam (DMK) as well as Left parties have opposed the bill with critics also alleging that it is not in the interest of farmers and the poor.
On April 17, the Centre issued a draft proposal for the amendment of Electricity Act, 2003, in the form of draft Electricity Act (Amendment) Bill, 2020 , inviting comments from stakeholders within 21 days. The deadline was later extended till June 2.
The draft bill aims to establish an Electricity Contract Enforcement Authority (ECEA) that will have the power of a civil court to settle disputes between power generation companies (gencos) and distribution companies (discoms).According to the draft, ECEA will have sole authority to adjudicate matters related to specific performance of contracts related to purchase or sale of power
Several states, including Telangana, Maharashtra and Chhattisgarh, have alleged that the amendments will take away the autonomy of state-owned discoms and state electricity regulators.
The draft bill also has a provision for direct benefit transfer (DBT) of subsidy provided to consumers, particularly to the agriculture and domestic sectors. Opposition leaders say this will work against the interest of farmers and poor domestic consumers, and insisted that the mode of payment should be left to state governments to decide.
The bill also aims to ensure a mandatory minimum purchase of power from renewable sources of energy and enforce stringent penal measures for non-compliance with the provisions in the act.
Chhattisgarh chief minister Bhupesh Baghel joined the chorus against the bill on Monday, writing a letter to RK Singh, the Union minister of state for power. He urged the government to abandon the move in view of the Covid-19 pandemic and demanded that states be consulted before making it a law.
“The implementation of the bill will adversely affect the lower sections of society as the provision of cross subsidy in it is impractical and not in the interest of farmers and the poor,” he wrote. “The farmers will face a crisis if the subsidy on electricity given to them for irrigation is not continued and thereby, it will affect the production of food grains.”
Opposition parties are likely to form a united front on the issue to stall the bill in Parliament whenever it is convened in the aftermath of the pandemic, a Congress leader said on the condition of anonymity.
Last week, Maharashtra energy minister and Congress leader Nitin Raut said the Centre intends to “override and dominate the State Government’s responsibility in the administration of power Generation, Transmission and Distribution of Electricity”.
He said the Constitution of India, under the Seventh Schedule, provides powers to both the Centre and states to make appropriate laws on matters related to electricity. But the proposed amendments will “centralise power” and make “states weaker in the matters related to power sector”, he said in a statement on June 3.
Raut added that the Centre was trying to privatise distribution, transmission and generation “as it was now taking various measures and policy decisions to privatise the Public Sector Units under various pretexts”.
Former Karnataka chief minister Siddaramaiah has echoed Raut’s views while DMK president MK Stalin has said the bill should be withdrawn.
Telangana chief minister K Chandrashekhar Rao has written to Prime Minister Narendra Modi, saying the bill was against the spirit of federal polity. He urged non-Bharatiya Janata Party (BJP) chief ministers to strongly oppose the move and launch joint efforts to protect the rights of the states.
“We have invited comments from all stakeholders and states, which is why the draft bill was put in public domain. The ministry will go through all the inputs and comments before finalising the bill,” a spokesperson for the ministry of power said. Earlier amendments to the Electricity Act proposed by the Centre in 2014 and 2018 failed to become a law.
“The most crucial problem of the power sector is the financial condition of discoms which is the consequence of inadequate and infrequent tariff revisions which is the principal responsibility of state regulatory commissions. The willingness of the SERCs (state electricity regulatory commission) to maintain their independence from the State which appoints can be seen as the main reason for lack of tariff revisions,” said former power secretary P. Umashankar.
“The proposed amendment by taking away the authority of the State to select the regulators seeks to establish the independence of the regulators,” he said.
“States may oppose the amendment but they are responsible to have brought things to this pass because of their reluctance to tariff revisions and their unwillingness to allow the regulators to function independently,” he added.