In the present scenario, states pool in the availability of power and implements Merit Order Dispatch at state-level so that the energy requirement is met at the least cost.

In the proposed set-up, how the intermediary company will implement the merit order with multiple supply licensees is not known and will lead to endless disputes.

The All India Power Engineers Federation (AIPEF) considers the changes proposed in the Electricity Act, 2003, a matter of serious concern, as it will concentrate power in the hands of the Central government and will eventually lead to complete privatisation of power distribution in India.

AIPEF has warned against any unilateral rush-through of the proposed amendment bill in Parliament, as that will make 1.5 million power employees and engineers go on lightning strike in protest.

Shailendra Dubey, chairman, AIPEF, has said that in the proposed amendment there will be separate supply licensees, incumbent supply licensees and intermediate company to handle all power purchase agreements. In the present scenario, every state pools the availability of power and implements Merit Order Dispatch at statelevel so that the energy requirement is met at the least cost. In the proposed setup, how the intermediary company will implement the merit order with multiple supply licensees is not known and will lead to endless disputes.

He said that at present, the Central Electricity Regulatory Commission and State Electricity Regulatory Commissions are not guided by a tariff policy, whereas in the draft amendment, the tariff policy will become mandatory. This will make CERC as well as all SERCs subservient to policy dictates of the Central government issued through Section 3 of the Act. The regulators will no longer be independent from the government.

He said that the changes in the draft bill have been proposed to pave the way for privatisation of the power sector wherein supply licensees will be mostly from the private sector and the licensee will get an assured profit by way of guaranteed return on capital employed and by stipulating that licensees will get their expenses covered without revenue gap. It can be said that the changes in tariff have been proposed to encourage privatisation and ensure guaranteed profits to private parties.

The draft amendment proposes that the cross subsidy payable to different sets of consumers within the distribution area will be reduced progressively and eliminated in a period of three years. This is a policy matter for each state to decide. Further, any subsidy payable to a consumer will be through the provision of direct benefit transfer and this proposal is practically unworkable and sure to fail.