New Electricity Bill Another Attempt to Further Privatise Power Sector, Say Experts

On 17 April, the Union Ministry of Power notified the Draft Electricity (Amendment) Bill 2020, and sought comments from stakeholders within 21 days. While this is the fourth draft of the electricity amendment bill by the BJP-led government since 2014, experts are apprehensive over various proposals of the bill, such as setting up another tribunal for settling power disputes and the introduction of a franchisee system for power distribution among other issues.

The new bill proposed that states will be allowed to grant subsidies, but without provisioning for it in the tariff determined by the state regulators. Experts caution that this would affect state-sponsored power subsidies to the agriculture and the domestic sector.

It has been reported that the state government of Telangana, under the Telangana Rashtra Samithi, has decided to oppose the bill over the proposed changes which related to subsidies and the privatisation of power distribution.

“The bill openly seeks to give payment security to private companies to enable them to profit, without regard for the State distribution companies,” said Padamjit Singh, chief patron of All India Power Engineers’ Federation (AIPEF).

AIPEF has questioned the urgency to push for the bill amid a lockdown. The body, which represents power sector employees and engineers, stated that it would require more time to submit its response to the draft, owing to the prevailing lockdown in the country.

The body wrote to the ministry on April 18, mentioning that several of the proposed amendments have legal repercussions, and would require in-depth interactions with legal experts dealing with electricity laws. In the letter, the AIPEF asked the ministry if the “time period for submission of comments and objections to the proposed amendments of Electricity Act 2003 may kindly be extended up to September 30”.

While the bill proposes to set up an Electricity Contract Enforcement Authority (ECEA), a semi-judiciary authority to settle legal disputes, another tribunal will make the power sector subject to even more legal disputes, said Padamjit Singh. “A new tribunal will only add to the prevailing chaos of litigation which is already extensive and unmanageable,” Singh told NewsClick.

On privatisation, Singh said that the move was being introduced through the back door and that similar experiments failed at Nagpur, Ujjain, Bihar and Agra. “The power sector is a victim of repeated experimentation by way of attempts to tamper with the Statute, with clear intent to help private parties to profit, while driving State discoms into financial collapse,” Singh told NewsClick.  He added that since electricity was a concurrent subject under the Constitution of India, the new proposals of the ministry must be referred to the Standing Committee of Parliament on energy, with a directive to give states adequate opportunity of hearing and also for Associations and Trade unions and consumers to submit their objections.