Letter by All India Power Engineers Federation (AIPEF) to Power Minister
No.81-2022 /EA BILL 2022
Sri R K Singh
Govt of India
Sub: Matters relating to the Bill No. 187 of 2022: The Electricity (Amendment) Bill 2022 – A bill to further amend the Electricity Act 2003.
- Preliminary submission:
Before taking up the amendments proposed in Electricity Act 2003 through Bill No.187 of 2022, it is necessary to analyze how and in what manner the Govt. of India, Ministry of Power, administered the existing statute, (Electricity Act 2003). Only then the proposed amendments can be analyzed.
- The Electricity Act 2003 contains the constitution and role of two constitutional authorities, viz. (a) Chairman CERC (b) Chairperson APTEL.These are the two authorities who have been given key roles and assignment in implementing the Electricity Act 2003 including Regulatory and Tariff matters.
2.1 Analysis of CERC:
This is the key authority for administering tariff and Regulatory matters. Post of Chairman CERC has fallen vacant on 12.6.2022 and at present (Oct 2022), it is lying vacant.
2.2 Vacancy circular inviting applications for the post of Chairman CERC was issued vide No. 25/5/21-R&R dated 5.1.22 with last date of 2.2.2022. The earlier application of 5.7.21 remained valid.
2.4 The application for the post of Chairman CERC is pending with the Ministry of Power since 2.2.22 and the post of Chairman CERC remains vacant.
- Chairperson APTEL:
The vacancy circular inviting applications for the post of Chairperson APTEL, No. 46/12/20-R&R was issued by the Ministry of Power on 5.2.21 with the last date of application being 19.3.21. The post of Chairperson APTEL became vacant on 13.8.21 and remains vacant.
- From the documents relating to selection/appointment of Chairman CERC and Chairperson APTEL the position is summarized:
- In the draft Electricity (Amendment) Bill, 2021 time bound targets have been assigned to the tasks assigned to CERC and/or APTEL which would directly suffer when the post of Chairman remains vacant. In this way the non-appointment of Chairman CEA and Chairperson APTEL by the Ministry of Power violates the letter and spirit of the Bill No.187 of 2022 making the bill invalid and not worthy of being finalized. The specific instances of how the draft bill has become invalid and ineffective are as under:
5.1 Section 15:
In case an application for Licence is not decided in 90 days, it would be deemed as approved.
Non appointment of Chairman CERC renders this provision as invalid.
5.2 Section 42.4B
In case of dispute between distribution licensees regarding Open Access, the dispute is to be adjudicated by the appropriate Commission.
Non-appointment or vacancy of APTEL will make this provision as invalid.
5.3 Section 59
In absence of an appropriate Commission Chairman, new provision of compliance of guidelines regarding corporate governance cannot be implemented.
5.4 Section 61(g)
The proposed amendment (addition) that “Tariff recovers all prudent costs incurred for supply of electricity” would result in frequent challenges relating to tariff before APTEL which would not be possible for adjudication with the post of Chairman APTEL being vacant.
5.5 Section 51(ga)
Reducing cross subsidies as specified by appropriate Commission – this provision would result in disputes and frequent challenges before APTEL which cannot be possibly resolved / adjudicated if the post of Chairperson APTEL is kept vacant.
5.6 Section 6.2(Subsection 4)
This section allows the “appropriate Commission” to amend the tariff up to four times in a year.
For this provision to be implemented, functioning of State Regulator as well as APTEL is necessary since the changes in tariff are liable to be challenged for adjudication before APTEL. Functioning of APTEL under its Chairperson is necessary.
5.7 Section 64
Section 64 allows the suo-Moto proceedings for tariff to be taken up if the tariff petition is not filed within the time prescribed. In case of these proceedings, which are in the nature of a dispute, functioning of APTEL as well as CERC is essential in order to adjudicate issues relating to Suo-Moto proceedings.
5.8 Section 63 (Sub section 3)
The draft bill prescribes a time limit of 90 days to decide the tariff petition instead of the existing 120 days as allowed under Electricity Act 2003. While the draft bill intends to reduce the tariff determination period by 30 days, action of Govt. of India to keep the post of Chairperson APTEL and Chairman CERC vacant goes against the letter and spirit of the Govt. of India own bill 1987.
It is a serious indication of self-contradiction between the government itself wherein Govt. of India / Ministry of Power is contradicting its own policy for reducing the time period for deciding petitions, on the one hand and keeping the post of Chairperson APTEL vacant on the other hand. Instead of initiating a new bill with the proposal to reduce the time period for tariff decision from 120 days to 90 days, Govt. of India / Ministry of Power must take action to fill the statutory post existing under present statute Electricity Act 2003 so that the functioning under this act is streamlined and expedited. Further, when the existing posts of Chairman CERC and Chairperson APTEL are being kept vacant for extended periods, it indicates an open violation of the existing statute which is not a healthy sign.
5.9 Section 77 – Qualifications of Chairman CERC
This is another case wherein Govt. of India is contradicting its own policy. While the post of Chairman CERC is vacant since 12.6.22, Govt. of India has no basis to move an amendment of qualifications of the post of Chairman CERC when the post is vacant and non-functional. Govt. of India must fill up the posts of Chairman CERC as per the prevailing statute Electricity Act 2003 which is in force and applicable. Hence, Govt. of India before considering or deliberating a change of qualification for post of Chairman CERC must first cure the violation of statute which results when the post is kept vacant. The Govt. of India is not entitled to deliberate the draft amendment of qualifications of Chairman CERC when the post is vacant and does not exist due to the non-compliance of Electricity Act 2003.
5.10 Section 78
While Govt. of India is in the process of deliberating and processing a Bill No.187, the provision of statute i.e. Electricity Act 2003 remains valid and in full force. While the issue of amendment to qualification remains under deliberation, the hard fact remains that Chairman CERC post has been rendered vacant since 12.6.2022 which is an outright violation of statute. Govt. of India was at full liberty to initiate proceedings for selection of new Chairman CERC even a year or more in advance, to complete the appointment as per existing statute i.e. Electricity Act 2003. Having violated Electricity Act 2003, by keeping the post of Chairman CERC vacant, Govt. of India must give priority and cure this violation on priority.
5.11 Section 79 (c)
Draft amendment bill clause under section 79(c) provides that Chairman CERC can constitute a “bench” in order to adjudicate disputes relating to contracts. This is again an indication of self-contradicting and self-defeating functioning of Govt. of India. While Govt. of India has failed to appointment Chairman CERC and kept the post vacant since 12.6.22 with what logic the bench can be constituted when the authority i.e. Chairman CERC does not exist due to vacancy of post.
5.12 Section 112
In this amendment Govt. of India has proposed that APTEL, comprising one Chairman and three other members, the strength of APTEL can be increased as prescribed by the Central Government. The same anomaly / mistake has been committed in this case also because the post of Chairperson APTEL has been kept vacant since 13.8.2021. This is again a self-contradiction and self-defeating approach on part of Govt. of India since the first priority should have been to fill the vacant post of Chairperson APTEL. The issue of increasing the number of members comes subsequently. It is to be reiterated and stressed that the priority has to be given to implementing the provisions of existing statute, Electricity Act 2003 which in this case means expediting the appointment of Chairperson APTEL. Since the post of Chairperson APTEL has remained vacant since 13.8.21, the issue is that nothing prevented the government from taking earlier steps for making the appointments as per the existing statute.
It needs to be stressed that by keeping the post of Chairman APTEL vacant, the Govt. of India has extended the period of violation of law since the existing statute does not allow the Govt. of India to keep the post of Chairperson vacant. How and under what time frame the amendments are processed and finalized, is not known at this stage. However, what is known with certainty is that the Govt. of India has violated Electricity Act 2003 by keeping the post of Chairperson APTEL vacant for a prolonged period.
5.13 Section 142
The section 142 is quoted as under,
“Section 142. (Punishment for non-compliance of directions by Appropriate Commission): In case any complaint is filed before the Appropriate Commission by any person or if that Commission is satisfied that any person has contravened any of the provisions of this Act or the rules or regulations made thereunder, or any direction issued by the Commission, the Appropriate Commission may after giving such person an opportunity of being heard in the matter, by order in writing, direct that, without prejudice to any other penalty to which he may be liable under this Act, such person shall pay, by way of penalty, which shall not exceed one lakh rupees for each contravention and in case of a continuing failure with an additional penalty which may extend to six thousand rupees for every day during which the failure continues after contravention of the first such direction.”
AIPEF has submitted a complaint that Govt. of India has committed violation of section 77 of Electricity Act 2003 by keeping the post of Chairman CERC vacant since 12.6.22 and further violated section 112 by keeping the post of Chairperson APTEL vacant since 13.8.21.
Since it has been established that the Ministry of Power has indeed violated Electricity Act 2003 by keeping the posts as above vacant, AIPEF again stresses that the first priority must be to cure the violations of statute as have been pointed out time and again in the previous paras.
AIPEF therefore demands that Govt. of India must withdraw forthwith the amendment bill No. 187 of 2022 and give first priority to curing the violations of Electricity Act 2003 starting with the appointment of Chairman CERC and Chairperson APTEL as per provisions of Electricity Act 2003.
- The implementation of the existing statute, Electricity Act 2003 is hugely dependent upon the proper and correct functioning of key statutory posts i.e. Chairman CERC and Chairperson APTEL. However, the present situation is that while Govt. of India is trying to amend the terms and conditions relating to appointment of CERC and APTEL as per Govt. of India proposals contained in Bill No.187, at the same time, the posts remain on the statute book and Govt. of India has no basis or justification to keep these posts vacant. This was all the more relevant because the vacancy of Chairman CERC and Chairperson APTEL was known years in advance to the Govt. of India and Govt. of India had sufficient time to appoint the new incumbents as per the terms and conditions of the prevailing statute Electricity Act 2003.
6.1 The appointment Committee of the Cabinet, viz. ACC which is chaired by the Prime Minister has the responsibility to deal with such appointments as per the prevailing statute, Electricity Act 2003. Hence, for the current anomaly of non-functional posts of CERC and non-functioning of APTEL it is a clearcut violation of Electricity Act 2003 for which the ACC as well as Ministry of Power are squarely answerable.
6.2 The DoPT has issued a compendium of guidelines for dealing the cases relating to board level appointments in CPSUs. These guidelines would be applicable for dealing of appointments to CERC or APTEL as per Electricity Act 2003.
6.3 For example, one of the guidelines is that the post must be advertised one year and 3 months in advance when the vacancy date is known in advance. It can be concluded that for the delay in appointment of Chairman CERC and Chairperson APTEL, the authority answerable is the competent authority which is not other than the ACC, chaired by the Prime Minister.
6.4 It can be further concluded that the non-compliance of provisions relating to appointment of Chairman CERC as per the present terms and conditions of Electricity Act 2003, for these clearcut and established violations of the Act, invites the action under section 142 of Electricity Act 2003. The applicable lines are again quoted as under:
“Punishment for non-compliance of directions by Appropriate Commission): In case any complaint is filed before the Appropriate Commission by any person or if that Commission is satisfied that any person has contravened any of the provisions of this Act or the rules or regulations made thereunder …….”
- As explained in above paras, the Govt. of India has no jurisdiction to violate specific sections of the Electricity Act 2003 and the exercise for amendment cannot and must not overrule the existing statute which has been passed by Parliament in 2003. All India Engineers’ Federation therefore demands that the amendment bill No. 187 should be withdrawn and Govt. of India should concentrate on correct and prompt implementation of the existing statute.
Secretary, Power, Govt of India, New Delhi.