Electricity Amendment Bill-2021 would lead to denial of electricity to millions of under-privileged citizens and increase in tariff for consumers

Shri Dipak Kumar Saha
Joint Convener
Co-ordination Committee of Electricity
Employees, Engineers & Pensioners, ASEB.
Bijulee Bhawan, Paltanbazar, Guwahati-1

The Ministry of Power (MOP), was all set to introduce the Electricity (Amendment) Bill-2021(EAB) in the last monsoon session of Parliament but failed due to the adjournment of the session & non receipt of the Comments of the Cabinet Ministers The proposed EAB-2021 is strangely not in the public domain for the comments and suggestions of the stake holders, namely electricity Consumers & Employees.

On February 1, 2021 the Finance Minister placed the Budget for the financial year 2021-2022 & declared that 20 new bills would be introduced in the Budget Session along with the EAB-2021. It was planned very tactfully to introduce in the Budget Session as the last attempts to amend the Electricity Act-2003 had miserably failed.
Following Finance Minister’s declaration, the MOP circulated the proposed bill on February 5 to all Power Secretary / Union Territories (UT) & Chairman-Cum-Managing Director (CMD) of the Power Distribution Corporations (Discom) of all States/UTs to submit their comments on EAB-2021 within two weeks but by another circular on February10, the MOP intimated them to ensure their presence in the Video Conference (VC) held on February 17.

The VC held with 37 nos. of States & UTs attending for discussion, giving just one hour for each of the four regions was quite inadequate for discussion. (Eastern region for 7 state, Northern region for 10 states, Southern region for 8 States, and East & North Eastern Region along with Assam) Only five minutes were allotted to each state to express views which will determine the fate of 64 lakh electricity consumers of the State of Assam. Assam was led by the then Industry Minister, assisted by the Commissioner Department of Power & Managing Director APDCL.

In the VC several States/UTs raised apprehension about cherry picking of consumers & high penalty provisions for Renewable Power Purchase Obligation. De-licencing of Discom & entry of multiple Suppliers utilising the existing network without any investment was also opposed.

The MOP was very keen to move the Bill in the Budget Session, so on 18th February 18, it convened an International Webinar inviting the representatives of World Bank, IMF, International Financial & Power Experts and Multi-National Corporations.  Prime Minister Narendra Modi, inaugurating the webinar, endorsed the bill stating that it would give ‘Choice to Consumers’ and the reforms are in the interest of consumers. In webinar, some selected corporate’s delegates & industrialist were invited as power experts who supported the move. The Bill is very clearly in favour of private sector participation in electricity distribution.

As per Electricity Act-2003, State Electricity Regulatory Commissions (SERC) are empowered to review the functions of State Power Sectors and allowed to recommend its rectifications of faults and accordingly the States Governments do needful. A similar VC with SERC was conducted on March 2. The SERC could not agree with the proposed Bill. MOP again intimated all the States/UT’s on March 15 asking to furnish their views by 24th March.

The MOP had sent the Bill to the Ministry of Law & Justice to legally vet it and had also circulated it to interrelated Cabinet Ministries for their clearance, to table the bill in the Parliament session. The monsoon session of the Parliament was scheduled from July 19 to August 13 and GOI selected 17 bills to introduce in Parliament including EAB-2021. It was sought to present it in the Parliament without any consultation with the major stake holders like electricity consumers & employees which is completely against the democratic process of law-making.

As per EAB-2021, Electricity Distribution will be de-licenced and multiple private companies will be allowed in a single area using the existing network of State Discom without any investment. Opening up electricity distribution to private companies without any checks entailed grave implications for the consumers. The profit seeking private players would seek to corner the high-paying, high-end power consumers leaving State run discoms to cater to the low-paying consumers. This would ultimately lead to huge loss for the public sectors companies. Once the cross- subsidy mechanisms are stopped, weaker sections society would be denied access to low-cost electricity. The proposed bill intends to give ‘Choice to consumers’, resulting in better service and competitive rates. The stated intension is lofty, as is underlying principle. The proposed de-licensing, which allows unregulated private capital with little entry and exit barriers, will benefits only a few big consumer groups and profit seeking companies will potentially derail the gains of universal electrification, defeating the very intention and spirit of the proposal.

The introduction of untested models in power distribution is dangerous and is likely to lead to absolute mayhem. The move is to have a socially debilitating impact as the sector is responsible for dispensing a crucial basic amenity. Considering the relevant facts and prevailing circumstances, it is clear that the proposed reforms are counterproductive and would lead to denial of electricity to millions of under- privileged citizens and increase in tariff for domestic and agriculture consumers, benefiting only a few privileged sections of the society. If the Union Govt considers reforms of the nature envisioned in the draft as policy imperative, it has to be done after detailed practical impact analysis and more exhaustive stakeholders’ consultations.

Two important features adopted in case of E A-2003 but not considered in case of EAB-2021 are:

(1) there is no adequate discussion on the EAB-2021, while there was the principle of extensive consultation & deliberation with all stake holders and experts.  The States/UTs were given inadequate time for discussion in the V C & SERC were also not considered important.

(2) there was comprehensive statement of objectives & reasons which became a part & parcel of the EA-2003, which is absent in case of EAB-2021. It can lead to overhauling of the very basic structure of the Act itself. So, the principle & the procedure adopted at the time of introducing and legislating the EA-2003 must necessarily be followed while introducing and legislating the amendments.

As the EAB-2021 could not be placed in the last monsoon session of Parliament due to adjournment, so before introducing it in the next Parliament, the MOP must publish the draft EAB -2021 in public domain for comments & suggestions of all stakeholders allowing at least three months for submission of comments, objections and suggestions. There must be extensive discussion & deliberation on it at all levels.

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