No. 36 - 2020 / Electricity (Amendment) Bill 2020 15-05-2020
Sub: AIPEF APPEAL TO ALL CHIEF MINISTERS AGAINST ELECTRICITY (AMENDMENT) BILL 2020
Respected Chief Minister,
The Union Ministry of Power circulated draft amendment to Electricity Act 2003 through Public Notice dated 17.4.2020 and invited Comments and Objections by 05.06.2020.
All India Power Engineers Federation (AIPEF) wants to draw your kind attention against the spirit of E A Bill 2020 which affects the rights of State in the subject as under:
a) As per Constitution of India, electricity is a concurrent subject thereby the State Governments have equal right and jurisdiction over matters relating to electricity and pertaining to the State, such as Consumer Tariff and Subsidy.
b) Proposed amendment is whereby State Electricity Regulatory Commission , is required to notify tariff without subsidy and with provision of Direct Benefit Transfer will be practically unworkable and result in huge hardships to the agricultural consumers who will have to pay the electricity bills upfront while subsidy may be delayed to any extent.
c) Consumer Tariff and subsidy are matters of State jurisdiction wherein direction by Center would be counter to the Constitution of India.
d) The existing Electricity Act 2003 has sufficient flexibility by which it can be implemented by various States across the country as per the prevailing circumstances and conditions which can vary from State to State. Diversity across States is a reality that can be accommodated under the prevailing Electricity Act 2003 which recognizes the concurrent nature of electricity whereas the proposed amendment is draconian and dictatorial, by which the right of States would be snatched by the Center.
The Electricity Act 2003 has clear-cut provisions for subsidy in section -65 and it can accommodate State Government Policy while further allowing for SERC/ CERC to be guided by the Tariff Policy and National Electricity Policy.
e) The proposed creation of Electricity Contract Enforcement Authority is just for forcing the States to purchase high cost power so as to ensure windfall profit for IPPs and multinationals.
Already the mechanism for dispute resolution and arbitration is available in all PPAs, wherein:
i) There is provision for adjudication of disputes by SERC or CERC.
ii) Referring disputes under Arbitration and Conciliation Act 1996.
Since the Arbitration and Conciliation Act 1996 remains in Statute and remains applicable as per existing PPAs across the country, it is highly illogical and irrational to introduce another quasi judicial authority, ECEA on the same subject. This will lead to multiple disputes and confusions and this aspect has not been considered in the statement of Objects and Reasons how there can be two overlapping statutes on the same subject.
Particularly in case of projects awarded under Competitive Bidding Guidelines, and Section-63 of the Electricity Act 2003 and Competitive Bidding Guidelines from Govt. of India include the Standard Bid Document and Model PPA. Under Guideline No. 5.17 it provides for the dispute resolution and referring of dispute under Arbitration and Conciliation Act 1996. Since these Guidelines are statutory in nature and the basis on which competitive bidding was done, the PPA under these guidelines does not have any scope for introducing the proposed ECEA.
f) The amendment regarding Renewable Purchase Obligation (RPO) provides for penalty in case of shortfall in meeting RPO target. The Statement of objects and reasons does not give the complete position that under existing Govt. of India target, 175 GW Renewable Power capacity has to be achieved by 2022 and this target is now increased to 450 GW by 2030. With such huge target of renewable capacity, the States would be having to purchase renewable capacity under RPO even though renewable power, may be of high cost and unaffordable. The RPO mechanism would enable the GoI to finalise contracts even at high tariff while States would be forced to off-take such power.
At this period of time when all States are busy in fighting to combat COVID - 19 Pandemic, AIPEF requests you that the State Governments must consolidate their objections to the Electricity (Amendment) Bill 2020 and to press upon Govt. of India to put the amendment on hold and for extending the time limit for filing objections to 30th Sep-2020 or whenever situation becomes fully normal.
Thanking you with regards.
Sincerely Yours
Shailendra Dubey
Chairman