Power Ministry brings new draft of Electricity Amendment Bill

By: |
April 18, 2020 5:19 PM

The decision of the ECEA can be challenged at the Appellate Tribunal For Electricity (APTEL) and, subsequently, at the Supreme Court.

The ministry has sought the comments of the stakeholders on the Bill with three weeks from April 17.The ministry has sought the comments of the stakeholders on the Bill with three weeks from April 17.

The Union power ministry has come out with fourth draft of the Electricity (Amendment) Bill since 2014, which seeks to set up an Electricity Contract Enforcement Authority (ECEA) having power of a civil court to settle disputes related to power purchase agreement between discoms and gencos.

The draft provides that the ECEA will have sole authority to adjudicate matters related to specific performance of contracts related to purchase or sale of power, between power generation companies (gencos) and distribution companies (discoms).

The decision of the ECEA can be challenged at the Appellate Tribunal For Electricity (APTEL) and, subsequently, at the Supreme Court.

The ministry has sought the comments of the stakeholders on the Bill with three weeks from April 17.

Commenting on the Bill, All India Power Engineers’ Federation (AIPEF) V K Gupta told PTI, “The setting up of ECEA would dilute the power of the state and central regulatory commissions to settle matters related to PPAs (power purchase agreements) between discoms and gencos.”

Currently, state electricity regulatory commissions and Central Electricity Regulatory Commission settle state-level and inter-state PPA disputes, respectively.

He also said, “AIPEF strongly condemned the timings of the power ministry’s move to bring back the Electricity Amendment Bill 2020 when the whole country is fighting against the COVID-19 pandemic.”

He was of the view that the bad experience from the COVID-19 crisis should have led to nationalise all sectors, including power, across India.

“At this juncture, the Government of India’s step of privatization of the power sector through the proposed amendments in the Electricity Act 2003 is “ill-timed and ill-intentioned”, he added.

The ministry had brought first draft in 2014 that was introduced in the Lok Sabha seeking separate carriage and contend electricity distribution business. The Bill could have given option to consumers to change their service providers like they do for their mobile phone service. But, unfortunately, that Bill lapsed after dissolution of the Lok Sabha.

The second and third drafts were circulated in 2018 and 2019.

The AIPEF has demanded to put the bill on hold saying, “While the economy of the whole nation is paralysed and administration is in doldrums, the timing is not suitable for introducing the enactment of amendments to any law under such conditions and thus Electricity Amendment Bill 2020 be put on hold.”

The body has also shot off a letter to Power Minister R K Singh demanding that the proposed date of receipt of comments should be extended to September 30 as no discussion can take place due to the lockdown.

It also urged all state governments to seek extension in time for giving their proper reply.

At first glance, Gupta said, “The purpose of the Bill seems to be to privatise discoms and ensure payment to private generators. The introduction of distribution sub-licensee and franchisee without separate licenses for them and no schedule or dispatch of electricity without the security of payment clearly points towards the intentions of the power ministry.”

The body is of the view that the central government is out to destroy state sector despite the fact that during the COVID-19 crisis, only the state sector companies stood by the government, while private entities were nowhere visible in this bad time on the country.

“The proposed amendments in the Electricity Act will increase the electricity tariff exponentially. Already due to private generators, average tariff across India is Rs 8 and with these proposals, it will rise to Rs 10,” said Padamjit Singh, chief patron, AIPEF.

The Bill also provides that the Electricity Act would be applicable to the entire country, including the Union Territories of Jammu and Kashmir and Ladakh.

It also provides that the cross (power) border trade shall cover import or export of electricity from India and any other country. The transaction related to passage of electricity through India would be treated as transit between two other countries.

The draft law provides for introduction of power distribution sub-licensee or franchisee, which would not require a separate licence from state commission and providing information about them would sufficient.

It also calls for creating National Renewable Energy Policy by the central government in consultation with state governments.

It also provides additional roles to the National Load Desptach Centre that include scheduling and dispatch of power across the country in accordance with contracts.

The bill says that there would no schedule or despatch of electricity unless there is adequate security of payment as per the contract.

The bill enables state as well as central power regulators to specify transmission charges under open access. Earlier, both functions were with the central commission.

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