All India Power Engineers  Federation (AIPEF) had come to know from media reports and website sources that Govt. of India intends to introduce the Electricity (Amendment) Bill -2021 in the coming budget session of parliament.

2. It may be recalled that on 17/4/2020, the Ministry of Power had issued public notice inviting comments and suggestions on the draft Electricity (Amendment) Bill -2020. The All India Power Engineers Federation had submitted its detailed comments and suggestions to the Ministry of Power in response to the public notice of 17/04/2020. Later on it was informed that Govt. of India was considering the various comments and objections for making suitable amendments to the draft bill 2020 which would then be sent to the Law Ministry before being submitted to parliament. At that time All India Power Engineers Federation had requested that the amended bill should be put in the public domain so that various stakeholders come to know about the various amendments made. Further, that the bill must be sent to the standing committee of energy of parliament.

3. However, now it is learnt that a new bill Electricity (Amendment) Bill -2021 is being submitted to parliament. The stakeholders and All India Power Engineers Federation do now know what amendments have been introduced in the original draft bill 2020. We again submit that transparency is a prime requirement which has not been implemented in the present case.

 4. The All India Power Engineers Federation therefore requests that the draft bill 2021 should be put on hold and made public so that all the stakeholders come to know about the various amendments which Govt. of India intends to introduce in the original draft bill of 2020. All India Power Engineers Federation represents that the draft bill 2021 may be having several clauses to promote the policy of privatization. We therefore consider it extremely important that the draft bill 2021 must be put in the public domain so that the various objectors have a reasonable chance to give their further comments and suggestions.

5.  All India Power Engineers Federation further submits that the original Electricity Act 2003 in its statement of objects and reasons had clearly stated that the Electricity Act 2003 has been finalized after extensive deliberation with various stakeholders and experts. All India Power Engineers Federation therefore submits that the same principles must be adopted to ensure extensive deliberations w.r.t. the amendment bill 2021. The relevant quotation of Electricity Act 2003 statement of objects and reasons is given as under ( as quoted in Supreme Court Energy Watchdog Judgment of 11-4- 2017)

 -  Relevant provisions of the Electricity Act, 2003 16. The 2003 Act did away with three earlier statutes in which a completely different regime for generating and supply of electricity was provided for, namely, the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1928 and the Electricity Regulatory Commissions Act, 1998. The Statement of Objects of Reasons for this Act reads as follows: “The Electricity Supply Industry in India is presently governed by three enactments namely, the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948, the Electricity Regulatory Commissions Act, 1998. 1.1 The Indian Electricity Act, 1910 created the basic framework for electric supply industry in India which was then in its infancy. The Act envisaged growth of the electricity industry through private licensees. Accordingly, it provided for licensees who could supply electricity in a specified area. It created the legal framework for laying down of wires and other works relating to the supply of electricity. Page 16 1.2 The Electricity (Supply) Act, 1948 mandated the creation of a State Electricity Board. The State Electricity Board has the responsibility of arranging the supply of electricity in the State. It was felt that electrification which was limited to cities needed to be extended rapidly and the State should step in to shoulder this responsibility through the State Electricity Boards. Accordingly the State Electricity Boards through the successive Five Year Plans undertook rapid growth expansion by utilizing Plan funds. 1.3 Over a period of time, however, the performance of SEBs has deteriorated substantially on account of various factors. For instance, though power to fix tariffs vests with the State Electricity Boards, they have generally been unable to take decisions on tariffs in a professional and independent manner and tariff determination in practice has been done by the State Governments. Cross-subsidies have reached unsustainable levels. To address this issue and to provide for distancing the government from determination of tariffs, the Electricity Regulatory Commissions Act was enacted in 1998. It created the Central Electricity Regulatory Commission and has an enabling provision through which the State Governments can create a State Electricity Regulatory Commission. 16 States have so far notified/created State Electricity Regulatory Commissions either under the Central Act or under their own Reform Acts. 2. Starting with Orissa, some State Governments have been undertaking reforms through their own Reform Acts. These reforms have involved unbundling of the State Electricity Boards into separate Generation, Transmission and Distribution Companies through transfer schemes for the transfer of the assets and staff into successor Companies. Orissa, Haryana, Andhra Pradesh, Karnataka, Rajasthan and Uttar Pradesh have passed their Reform Acts and unbundled their State Electricity Boards into separate companies. Delhi and Madhya Pradesh have also enacted their Reforms Acts which, inter alia, envisage unbundling/corporatisation of SEBs. Page 17 3. With the policy of encouraging private sector participation in generation, transmission and distribution and the objective of distancing the regulatory responsibilities from the Government to the Regulatory Commissions, the need for harmonizing and rationalizing the provisions in the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998 in a new self-contained comprehensive legislation arose. Accordingly, it became necessary to enact a new legislation for regulating the electricity supply industry in the country which would replace the existing laws, preserve its core features other than those relating to the mandatory existence of the State Electricity Board and the responsibilities of the State Government and the State Electricity Board with respect to regulating licensees. There is also need to provide for newer concepts like power trading and open access. There is also need to obviate the requirement of each State Government to pass its own Reforms Act. The Bill has progressive features and endeavours to strike the right balance given the current realities of the power sector in India. It gives the State enough flexibility to develop their power sector in the manner they consider appropriate. The Electricity Bill, 2001 has been finalized after extensive discussions and consultations with the States and all other stake holders and experts. 4. The main features of the Bill are as follows:- (i) Generation is being delicensed and captive generation is being freely permitted. Hydro projects would, however, need approval of the State Government and clearance from the Central Electricity Authority which would go into the issues of dam safety and optimal utilization of water resources. (ii) There would be a Transmission Utility at the Central as well as State level, which would be a Government company and have the responsibility of ensuring that the transmission network is developed in a planned and coordinated manner to meet the requirements of the sector. The load dispatch function could be kept with the Transmission Utility or Page 18 separated. In the case of separation the load dispatch function would have to remain with a State Government organization/company. (iii) There is provision for private transmission licensees. (iv) There would be open access in transmission from the outset with provision for surcharge for taking care of current level of cross subsidy with the surcharge being gradually phased out. (v) Distribution licensees would be free to undertake generation and generating companies would be free to take up distribution licensees. (vi) The State Electricity Regulatory Commissions may permit open access in distribution in phases with surcharge for – (a) current level of cross subsidy to be gradually phased out along with cross subsidies; and (b) obligation to supply. (vii) For rural and remote areas stand alone systems for generation and distribution would be permitted. (viii) For rural areas decentralized management of distribution through Panchayats, Users Associations, Cooperatives or Franchisees would be permitted. (ix) Trading as a distinct activity is being recognized with the safeguard of the Regulatory Commissions being authorized to fix ceilings on trading margins, if necessary. Page 19 (x) Where there is direct commercial relationship between a consumer and a generating company or a trader the price of power would not be regulated and only the transmission and wheeling charges with surcharge would be regulated. (xi) There is provision for a transfer scheme by which company/companies can be created by the State Governments from the State Electricity Boards. The State Governments have the option of continuing with the State Electricity Boards which under the new scheme of things would be a distribution licensee and the State Transmission Utility which would also be owning generation assets. The service conditions of the employees would as a result of restructuring not be inferior. (xii) An Appellate Tribunal has been created for disposal of appeals against the decision of the CERC and State Electricity Regulatory Commissions so that there is speedy disposal of such matters. The State Electricity Regulatory Commission is a mandatory requirement. (xiii) Provisions relating to theft of electricity have a revenue focus. 5. The Bill seeks to replace the Indian Electricity Act, 1910, the Electricity (Supply) Act, 1948 and the Electricity Regulatory Commissions Act, 1998. 6. The Bill seeks to achieve the above objects.” 

6. AIPEF again submits that in view of the critical importance of this bill, Govt. of India must give a commitment that the bill would be referred to the standing committee on energy so that AIPEF will have an opportunity to appear before the standing committee and explain its comments and suggestions in detail.

With Regards.

Sincerely Yours

Shailendra Dubey

Chairman