The government introduced the Electricity Amendment Bill 2021 in the Lok Sabha, amid stiff opposition and has been referred to the Parliamentary Standing Committee on Energy for wider consultations.
The Bill proposes radical changes in the power distribution sector, the weakest link in the electricity chain, by enabling multiple distribution licensing through more responsibilities and powers to the regulatory commissions and load dispatch centres.
Introduction of the bill faced severe opposition from opposition parties including Congress, The All India Trinamool Congress and Revolutionary Socialist Party of Kerala. The opposition claimed alleged the Bill is against the federal structure and that electricity is a concurrent subject in the Constitution. They said that multiple distribution licensees are against the interest of consumers and farmers and give overriding powers to the Central government. Power and renewable energy minister said there is no provision in the Bill touching subsidies for farmers. “It's a false propaganda. We have consulted each state. This Bill is pro-people and in favour of the power sector,” he said.
However, Biju Janata Dal MP Pinaki Mishra said, "If the bill is being referred to standing committee, everything can be discussed there." Singh addressing the Lok Sabha Chair said, “I have given notice of our intention to move the Electricity Amendment Bill 2022 to the Standing Committee. Entire matter will be discussed in the Standing Committee.”
The All India Power Engineers’ Federation (AIPEF) said lakhs of electricity employees and engineers participated in a protest demonstration against the Electricity Amendment Bill 2022, a move to privatise the power distribution in the country. AIPEF spokesperson V K Gupta said in a statement, “the Bill’s provisions on abolishing cross-subsidies will hit farmers and consumers adversely.” However, the power ministry has maintained, “There is no change in subsidy provisions. State can give any amount of subsidy, free power to any category of consumers. No provision affecting farmers.”
The Bill enables competition in retail distribution of power by allowing use of other distribution licensee’s network. Also, if a regulatory commission fails in deciding on grant of distribution licence within specified time, the application will be deemed to have been accepted. The Bill also provides for minimum tariff ceilings to avoid predatory pricing by power distribution companies as well as a maximum price to protect consumers. The Bill also proposes to empower the load dispatch centres to stop electricity supply to distribution utilities that do not maintain adequate bank guarantees in favour of power plants with which they are in tie-ups. The move seeks to address the recurrent problem of default by distribution companies in payment to generation companies.
The amendment to Electricity Act proposes to address the laxity of state electricity regulatory commissions in fixing adequate tariffs and enabling timely revisions. The Bill provides that the regulators will have to suo-moto initiate tariff proceedings in case distributions companies do not file petitions. Provisions related to removal of members of regulatory commissions in case of willful violation of overlooking the provisions of the Act, have been introduced in the Bill. It proposes to extend powers of civil court to the regulatory commissions which means they can attach properties and order properties to implement orders.
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