Why experts want govt to withdraw draft Electricity Bill

Experts question urgency of introducing a draft bill at a time when states struggle with COVID-19 

By Kundan Pandey
Published: Friday 01 May 2020
The government refused to learn from the past, with this push for a privatisation model through the draft bill, said an expert Photo: Wikimedia Commons

The Union government’s draft Electricity (Amendment) Bill, 2020 — that emerged on April 17, 2020, amid a nationwide lockdown to curb the spread of the novel coronavirus disease (COVID-19) — has raised several concerns over reportedly increasing centralisation and protecting private interests over the greater good of the country.

The Centre had earlier asked all stakeholders to provide comments on the draft of the bill within 21 days. After protests from several quarters, however, the government extended the deadline to submit all comments by June 2.

Several experts questioned the urgency of introducing the draft bill at a time when all the states struggle to curb the spread of the disease.

The states are trying to deal with a severe reverse migration crisis, where several migrants are left stranded across India, said Shailendra Dubey, the president of the All India Power Engineers Federation.

Three major issues in the draft bill were highlighted by experts:Electricity (Amendment) Bill, 2020

  • End of subsidies and cross-subsidies; in which the consumer; ‘direct benefit transfer (DBT)’ to consumers
  • Creation of the Electricity Contract Enforcement Authority (ECEA), a move aimed to further centralisation
  • Distribution sub-licensee and franchise

The draft bill defined distribution sub-licensee as a person recognised as such and authorised by the distribution licensee to distribute electricity on its behalf in a particular area within its area of supply, with the permission of the appropriate state commission.

A franchisee means a person recognised as such and authorised by a distribution licensee to distribute electricity on its behalf in a particular area within his area of supply.

Dubey, in a webinar organised by non-profit Centre for Financial Accountability on April 29, said the government was pushing for privatisation, with this draft bill aimed in the same direction. The government may first attempt to make NTPC Ltd the sub-licensee for distribution after taking it from the states and then subsequently hand it over to a private franchisee, he said.

It is, however, established that the franchisee model has not worked in India so far, according to experts. The government tried its hand in several states, with a majority of such experiments failing.

The cities where the government tried to establish a franchisee model included Bhiwandi, Nagpur and Sagar among many others.

The government refused to learn from the past, with this push for a privatisation model through the draft bill, according to Tejal Kanitkar, an associate professor in the National Institute of Advanced Studies.

The removal of subsidies and cross-subsidies was another big concern, as the draft bill said consumers will not get subsidised electricity.

There are two concerns with the Centre’s move to allow for a transfer of subsidies through DBT. Farmers will have to pay first from their own pocket, after which they will get subsidies, said Dubey, adding that farmers will have to pay first from their own pocket then only they will get the subsidy.

Are the country’s farmers in a position to pay Rs 4,000-5,000 in advance and wait for the transfer from their government, Dubey asked.

The concern with eliminating cross-subsidies is that it added to a burden on already-empty state coffers, with states not getting their dues from the Centre even during the pandemic, said Kanitkar.

The franchisee will cut off the connection of the consumer if subsidy is not paid on time, with the burden of arranging for a large sum going to the consumer, she said, adding that the consumer will have to approach the franchisee again to restart the connection if the connection is cut off, resulting in unprecedented chaos.

The other concern was increasing centralised control through the formation of the ECEA, with states bearing the burden, which is an unprecedented move, she said, adding that state regulators will also be appointed by a central committee.

The ECEA will disempower not only regulatory commissions in the states, but also people who will fight legal battles, said experts.

“My fear is that the new authority is being brought in with the single purpose of protecting the interest of licensee,” said Leo Saldanha, a member of non-profit Environment Support Group.

This was being done to create conducive environment for commercial viability and investments to survive, according to him. This is to make sure ease of business of the licensees / power generators, Saldanha said.

Saldanha explains how the ECEA dis-empower people of India, saying that the authority takes away the power of regulatory commissions on one hand, while ensuring that the high court, for instances where one has easy access to this judicial forum, will not be the place where people will go to seek justice, on the other.

“If we are not happy with the commission, we can easily access the high court and secure justice,” he said, adding that this will not happen any longer if the bill becomes law. Saldanha cited the example of the National Green Tribunal (NGT). Most NGT benches were inaccessible to a majority of the population.

If one is in Imphal, for instance and wants to litigate, she has to come to Kolkata, a journey that takes either two days by road or costs a huge sum of money by flight, he said.

This is why thousands were deprived of justice in their legal battle related to environmental matters, Saldanha pointed out, adding that people will be deprived of justice in matters related to electricity as well, if the bill becomes a law.

Every expert Down To Earth spoke to agreed that the draft bill is problematic and the government must withdraw it.

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.