Report by KEC correspondent
The Kerala state assembly passed a unanimous resolution on 5 August 2021 urging the Central government to withdraw the Electricity Amendment Bill, 2021. The key points of the resolution are given below.
The Chief Minister of West Bengal wrote a letter to the Prime Minister on 7 August 2021 conveying her strong opposition to the Bill and called it anti-people. A copy of her letter is enclosed.
Key points of the resolution passed by the Kerala Assembly are:
- A major clause in the proposed amendment is the non-requirement of license to operate in the power distribution sector. This will allow free entry of private players into the sector with the state government or the Electricity Regulatory Commission having no control over them.
- There is no obligation on these private players to invest in anything, including in the laying of new electricity lines. They will be authorised to carry and sell power along the existing transmission lines. Since such private players are allowed to come in without having to invest in asset creation and power generation, it will be easy for them to wind up operations when profits plummet. The amendment could, therefore, lead to uncertainty in the power distribution sector. Even after the amendment the responsibility to construct new lines and their maintenance would be that of public utilities alone.
- The amendment will create an opportunity for these private companies to concentrate their activities in urban areas and take away high-end users like commercial and industrial consumers from state utilities. As a consequence, the private sector will take over the lucrative areas leaving the public utilities to shoulder the burden of providing subsidised power to the poor and rural areas. When profits flow to the private companies and debt mounts on public utilities, it will lead to the destruction of the public sector which would eventually result in the denial of power to the poor.
- The amendment did not impose on private distributors even the basic obligation of providing power to all.